Pharmaceutical companies are among the most successful industries in the world. In most countries, entrepreneurs are always eyeing opportunities to invest in this business. In various countries, the industry has directly and indirectly contributed tremendously to development and offered thousands of jobs.
Challenges in Pharmaceutical Industry
In Nigeria, the full potential of the industry has not yet been fully exploited due to various challenges. Infrastructure; various key infrastructure challenges have prevented full exploitation of the potential of the industry. One of the main challenges has been lacking of stable power supply and some areas experiencing a lot of power outages. To counter this problem, many manufacturers have sought alternative energy sources such as solar energy, generators, and power inverters.
Low Financing in the Industry
There has been low access to credit among the various investors wishing to increase operational capacity and achieve greater manufacturing potential. One of the biggest disadvantages has also been the high lending rates offered by Nigerian institutions, some going over 20% interest rates. Lack of accessibility to foreign exchange has also been a major problem that has limited the importation of pharmaceutical equipment into the country.
It has also hindered the importation of finished products that are not locally produced in the country. The government of Nigeria has an important role to play in enhancing the welfare of the pharmaceutical industry. One of the important things to do this is to look for ways to promote investments such as creating favorable equipment importation terms such as reducing duty on such equipment, and also reducing taxes on local manufacturers.
Opportunities in Nigeria’s Pharma Market
Despite the various challenges in the country that have affected the growth of the pharmaceutical industry in Nigeria, there are several opportunities that exist and actions that need to be taken by the government to promote market growth. Nigerian leaders have learned that growth in the industry shall be earned by all means necessary. To unlock all the potential, a long term view must be adopted and measures taken to overcome the structural obstacles. There is a need to tap into the existing growth pockets, to improve patients’ access to medicines and manufacture enough supplies. A thorough analysis of the supply chain and the market structure shall be done by city and therapeutic areas as well as marketing channels. This will then help in developing innovative offerings that drive penetration into the growing middle class.
The country is among the most highly populated in the continent, it can well be hailed as the next frontier in pharmaceutical market after South Africa. As more of the populations join the middle class, the net household consumption is also expected to grow over the next ten years. The market value of this market is expected to grow by over 9 percent over the next 10 years. Estimates show that the market could reach a value of over 4 billion by the year 2026.
In conclusion, the pharma companies seeking to capture opportunities in Nigeria must develop solutions for infrastructure development, health care financing, and streamline importation systems of both medicines and pharmaceutical equipment.