Fitch Solutions has projected that the Nigerian naira will continue its decline, potentially reaching N1,993 per US dollar by 2028. This forecast underscores ongoing challenges in Nigeria’s economy, particularly in the healthcare sector, where the cost of medical devices is expected to rise sharply in response to the currency’s weakening.
According to a report by BMI Research, Fitch Solutions’ research subsidiary, Nigeria’s medical devices market will expand at a compound annual growth rate (CAGR) of 10.8% in local currency terms, despite facing substantial operational hurdles. This growth reflects rising demand in a sector driven by Nigeria’s large population, an increase in chronic and communicable diseases, and initiatives aimed at expanding healthcare coverage. The market is projected to reach a value of N171.1 billion (USD 344.7 million) by 2028.
The report highlights that as the naira depreciates, importing medical devices will become increasingly costly, further straining Nigeria’s healthcare system and reducing patients’ ability to afford essential medical technologies. Major international firms, such as Sanofi and GlaxoSmithKline, have already exited the Nigerian market, citing economic pressures exacerbated by currency devaluation. With over 95% of Nigeria’s medical devices imported, healthcare providers and consumers alike may struggle to access critical equipment and supplies.
Despite these challenges, BMI Research points to potential growth opportunities for local manufacturers as the weak naira could boost exports of Nigerian-made medical devices by making them more competitive in international markets. The report also mentions government efforts to support local production. In June 2024, President Bola Tinubu issued an executive order to reduce costs in the healthcare sector by eliminating tariffs, excise duties, and VAT on select healthcare-related imports. This initiative aims to lower production costs for pharmaceuticals, diagnostics, and other essential medical supplies.
The forecasted depreciation of the naira could pose challenges for Nigeria’s healthcare sector by increasing the costs of critical medical devices. However, Fitch Solutions suggests that if local manufacturing gains momentum, Nigeria could eventually reduce its reliance on imports and strengthen its medical devices market.
