A study by international consulting group McKinsey revealed that, pharmaceutical market in Nigeria is likely to grow to $3.6 billion by 2026 offering great opportunity for Indian Pharma companies.
“The Nigerian pharma market could rise by as much as nine percent a year over the next 10 years to reach $3.6 billion by 2026, making it as large as the South African market today.” the report stated.
“Over the same period, Nigeria could contribute between $1.9 billion and $2.2 billion to pharma sales growth, 55 per cent of it from prescription drugs,” the report added.
What makes the Nigerian market very attractive is a report by international accounting firm PwC earlier this year that projected the country’s population to grow by 119 per cent from 2015 to 399 million by 2050, making it the third most populous country in the world.
“With more than 60 per cent of the population falling within the working age of 15-64 years, this young workforce will be able to support the growth of Nigeria’s services sector, whilst also driving domestic consumption,” it added.
“Pushed by rapid urbanization, household consumption expenditure in Nigeria is projected to grow by eight per cent annually to reach $1.1 trillion by 2030, from $317 billion in 2014,” McKinsey said.
Much as there is a growing market, McKinsey described Nigeria as “complex” and suggested that companies that intend to enter must “address short-term economic setbacks and deep-rooted structural challenges before they can take advantage of growth in the longer term”.
These include the development of local solutions to some hindrances that prevent access to the market.
Nigeria’s “healthcare infrastructure is not fully developed,” because the existing infrastructure varies between cities and rural areas as well as between public and private sector, Mckinsey said, adding that this has resulted in the lack of facilities, equipment and capabilities to address the healthcare challenges.
“For example, its ratio of 0.9 hospital beds per 1,000 people is less than half the global average of 2.3, and its 0.07 intensive-care beds per 100,000 people is a fraction of Kenya’s 0.3. Because of this lack of infrastructure, an estimated 5,000 patients a month travel abroad for healthcare, with 60 percent needing treatment in cardiology, musculoskeletal, haematology or oncology,” the report said.
It is no wonder, therefore, that Nigerians have resorted to health tourism to access health care outside the country. India and South Africa have become the recognized destinations.
Mckinsey said companies that want to take advantage of the situation must first look at the top five cites which together have 45 per cent of the total consumption.
“Per capita spending in big cities can reach almost twice the national average. Cities are important for another reason too: their superior logistics, infrastructure, and healthcare capabilities make them an engine for structural changes in Nigeria’s health system.”