Nigeria’s Pharmaceutical Crisis: Foreign Exchange Shortage Threatens Drug Supply

Recent data from the International Trade Centre, a multilateral agency, reveals the alarming decline in pharmaceutical imports into Nigeria to $1.05 billion in 2022.

This marks a daunting 23.4 percent decrease from the $1.37 billion recorded in 2021 and a staggering 63.0 percent plummet from the $2.84 billion of 2020.

Simultaneously, pharmaceutical exports also saw a crippling 65.0 percent reduction, hitting $779 million in the last year.

According to Sam Ohuabunwa, the immediate past president of the Pharmaceutical Society of Nigeria, the industry is grappling with a substantial foreign exchange challenge, which has significantly hindered the importation of vital raw materials.

Despite these declines, local pharmaceutical production hasn’t made substantial progress.

The devaluation of the Nigerian naira has further exacerbated the situation. High inflation and devaluation make it increasingly difficult for pharmaceutical businesses to recover costs, ultimately rendering their products unaffordable for many Nigerians.

The impact is felt acutely in healthcare access, with medications for common illnesses like malaria and cough becoming increasingly expensive.

Nigeria heavily relies on imported drugs, active pharmaceutical ingredients, and equipment from countries such as China, India, Malaysia, and the Netherlands.

Over 70 percent of medicines in Nigeria are imported, contributing significantly to the country’s $10 billion annual healthcare spending.

The situation has worsened due to two recent economic recessions, which have weakened Nigeria’s foreign inflows, leading to a liquidity crisis in the foreign exchange market.

A survey conducted in Lagos highlights the stark price increases. Medications like the Ventolin inhaler, Augmentin, paracetamol, and Lonart DS, among others, have seen significant price hikes, making healthcare increasingly unaffordable for many.

The pharmaceutical industry’s struggles are mirrored in the financial performance of key companies like GlaxoSmithKline (GSK) Consumer Nigeria, Morison Industries, Neimeth International Pharmaceuticals, and Fidson Healthcare, all of which have faced declining revenues or profits.

Industry insiders cite poor infrastructure, low patronage, and the necessity to import most raw materials due to a lack of a reliable petrochemical industry as underlying issues.

The Nigerian government has launched a new National Drug Policy in 2021 with the aim of boosting local production.

Frank Muonemeh, executive secretary of the Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria, explained that the government must prioritize the local pharmaceutical manufacturing sector to ensure medicines’ security.