Nigeria’s pharma sector sees growing investment, but local manufacturing lags

Nigeria’s pharmaceutical sector is recording growing investor interest and commitments, but local manufacturing continues to lag, leaving the country heavily reliant on imports and still far from its 70% local manufacturing target.

The growing investments followed a series of federal government policies and initiatives introduced in 2023 after the exit multinational pharmaceutical companies operating in the country such as GlaxoSmithKline and Sanofi ending decades of operation in Nigeria.

The policies includes an executive order  that waives import duty and taxes on essential raw materials and equipment for local pharmaceutical production, pooled procurement initiatives, foreign exchange market adjustments, and initiatives like the and the launch of the Presidential Initiative on Unlocking the Healthcare Value Chain (PVAC)which targets 70% local pharmaceutical production by 2030.

They  are boosting invetsor confidence according to the  2025 Joint Annual Review (JAR) health sector report and data from government. The report however shows that progess in local manufacturing to reduce import reliance, a key target of government reforms have been sluggish.

Local production of medicines and health commodities remains at about 38%, meaning Nigeria still relies heavily on imports for its healthcare needs.

According to the report, Nigeria is doing relatively well in producing ready-to-use therapeutic food (RUTF), with over 11,700 metric tonnes made locally. Also, 66 products have shifted from importation to local production under NAFDAC’s 5+5 policy.

However, local production of other critical health commodities is still dragging, the country produced zero local production of malaria nets so far, despite Nigeria bearing one of the world’s highest malaria burdens.

There has also been no increase at all in the local production of priority tracer medicines, indicating that essential drugs are not seeing expanded domestic manufacturing.

The report further shows that Nigeria is also not exporting any WHO-prequalified health products

Manufacturers who spoke to Businessday said despite the laudable reforms,  some old constraints that forced the exit of the pharma giants however remain. They cited high operating cost, limited access to loan and expensive borrowing, among others as persisting pressures that continue to weigh on local producers today.

Lanre Shittu, chairman, HMA Medicals Limited  said Nigeria remains one of the most expensive environments for pharmaceutical manufacturing.

“Nigeria has one of the highest,  cost of manufacturing.  The cost of power is high, and we were trying to switch all our plants to gas. But the infrastructure for gas is not there. So we still have a very high cost operating environment. The challenges that were there before has not changed,” he said.

Shittu also pointed to bureaucratic delays, particularly around expatriate permits, and the difficulty manufacturers face in accessing finance.

“The Ministry of Interior has been a mess. For some of us that need expatriates, some of the departments have been held trying to get expatriate.

“The federal government were making a lot of noise that they were going to increase the amount of money available for loans to manufacturers. And then they came up with N50 billion for manufacturers in Nigeria. One company can use that N50 billion. Some people that have approvals at BOI for loans, even after they get their bank guarantees, cannot get that”, he said.

“Credit is the heart of manufacturing and commerce. If you don’t have access to credits, even with the crazy interest rates, you are dead. So that’s what it comes down to,” Shittu further said.

Francis Meshioye, president of Manufacturers Association of Nigeria alos agreed that  old constraints are persisting such as high operational cost due high electricity traffic, poor infrastructure, among others.

According to the JAR report some of the gaps limiting the sector includes the non-release of budgetary allocations by the government which has interrupted critical supply chain projects implementation.

It further noted that structural gaps persist across the states, as eleven states are yet to establish Drug Management Agencies (DMAs), a key component for effective pharmaceutical governance. In addition, sixteen state Central Medical Stores (CMS) remain below pharma-grade standards, limiting their capacity to store and distribute medical products safely and efficiently.

Stakeholders, however noted that while the growing pipeline of investments offers promise, they can only translate into tangible gains including in local production, if reforms are institutionalised and sustained to ensure continuity across successive governments.

Since the exit of major multinational drugmakers, Nigeria has signed at least 10 strategic memoranda of understanding with global pharmaceutical companies, technology owners and health partners, according to the 2025 JAR.

Among the most notable is a deal with Danish healthcare firm Vestergaard, which is scheduled to break ground on a new facility for the production of dual active-ingredient long-lasting insecticidal nets. When completed, the plant is expected to make Nigeria the first country in Africa to manufacture this category of malaria prevention tools locally.

Other agreements include collaborations with Abbott and Wondfo aimed at local production of rapid diagnostic tests, and a partnership with Siemens Healthineers focused on domestic manufacturing of ultrasound technology.

Nigeria has also signed a high-profile agreement with US-based Zipline to deploy drone technology for the distribution of vaccines and medical commodities to primary healthcare centres nationwide, a deal announced on the sidelines of the 79th United Nations General Assembly.

In 2024,  the nation’s healthcare sector has attracted over $4.8 billion in potential investments, according to the Presidency. In 2025, the Presidency announced another $2.2 billion in health sector commitments through the Nigeria Health Sector Renewal Investment Initiative.

Shittu, chairman of HMA Medical Limited, said while policies such as the  executive order have delivered real benefits, their impact may be short-lived unless they are institutionalised and backed by legislation.

He noted that the policy has been beneficial to manufacturers and have saved his firm hundreds of  millions of naira.

“As someone who has three manufacturing outfits. The executive order is a good policy. The government polivies have been beneficial to us. In our medical device company, in the first three months, in duty, we saved about 342 million. But, you know what an executive order means, right? and that’s the problem we have in Nigeria. They are not institutionalising things,” he said.

“They should pass all this through the National Assembly so that this is institutionalised. If government really want Nigeria to move forward. Manufacturing is not the most interesting business,” he urged.

Anyanwu Okechukwu, group managing director of DCL Laboratories, also commended the reforms noting they have been benefrcial to manufacturers but urged the federal government to reform inspection processes at the nation’s ports.

He expressed concerns over  the frequent misclassification of specialised medical equipment by port officials which is disrupting the supply of critical health products.

Okechukwu also expressed concerns over the absence of medically trained personnel at ports of entry which he said has created avoidable bottlenecks for laboratories and healthcare providers, as technical decisions are often taken without adequate professional understanding.

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