A new report from BMI, a subsidiary of Fitch Solutions, has projected that the naira will depreciate to N1,993 against the U.S. dollar by 2028, creating severe challenges for Nigeria’s medical device imports and healthcare industry.
This devaluation poses risks to the affordability and availability of essential medical technologies in a country that relies on imports for over 95% of its medical devices.
The report, titled “Weak Naira and Structural Challenges to Constrain Nigeria’s Medical Devices Market Growth,” suggests that despite expected economic growth, the healthcare sector may struggle due to rising operational costs and limited consumer purchasing power.
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“A weaker naira will increase import costs for medical devices and erode consumer spending power, impacting demand for crucial devices like diagnostics, orthopaedic, and dental products,” the report states.
BMI points out that the depreciation could stimulate the growth of local production by making domestically produced devices more competitive. However, challenges such as a shortage of skilled labor, outdated technology, and insufficient infrastructure remain barriers to expanding local manufacturing, despite government incentives.
President Bola Tinubu’s administration has taken measures to support the healthcare sector, including an executive order issued in June 2024 that eliminated tariffs, excise duties, and VAT on specific medical equipment to reduce production costs. Nevertheless, BMI warns that Nigeria’s medical devices market will continue to face short-term challenges.
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Despite these hurdles, the report forecasts growth for Nigeria’s medical devices market, which could reach N171.1 billion (approximately £344.7 million) by 2028. This growth will be supported by the country’s large population, initiatives toward universal health coverage, and the increasing prevalence of both chronic and communicable diseases.
Nigeria’s economic outlook predicts a recovery, with a 3.0% growth rate expected in 2024 compared to 2.9% in 2023. However, high inflation, tight monetary policies, and weak foreign investment could still hinder the healthcare sector’s expansion.
On the foreign exchange market, the naira traded at N1,681.42 per dollar as of Monday, November 11, 2024, reflecting a slight decline of 0.15% from the previous Friday’s rate of N1,678.87. Additionally, FX turnover on the official market dropped by 66.41%, from $1.4 billion on Friday to $471.5 million on Monday, indicating reduced market activity.
