Current Market Trends Main Competitors
Registration Process Barriers
Population: 170,123,740 million (est. 2012)
GDP*: USD 509 billion (2014 rebased figure)
Currency: Naira (N)
Language: English (official), Igbo, Yoruba and Hausa (The three major local languages)
The Nigerian healthcare sector is presently grossly underdeveloped and does not meet local needs. Much of the healthcare infrastructure is confined to major cities with people living in urban areas getting four times as much access to healthcare as those living in the rural areas. The private health sector is highly fragmented, consisting of many small medical facilities that are privately owned by medical professionals. Most of these hospitals have less than 10 beds with minimal facilities.
According to a 2015 BMI report, there were an estimated 3,534 hospitals in 2014, of which 950 were in the public sector. These include 54 federal tertiary hospitals comprising 20 teaching hospitals, 22 federal medical centers, 3 national orthopedic hospitals, the National Eye Centre, the National ENT Centre and 7 psychiatric hospitals, which are overseen by the Hospital Services Department of the Federal Ministry of Health (FMOH). The private sector is the dominant provider of care in many areas, accounting for the greater part of secondary care facilities. In 2005, the FMOH estimated that there were around 9,000 private health facilities, but information on their location and the level of care provided was patchy. Private health facilities are thought to include around 2,600 private hospitals and clinics. Nigeria had an estimated 134,000 hospital beds in 2014, equal to 0.8 per thousand populations, well below the rate for the African region. The number of hospital beds is estimated to have grown at a compound annual growth rate (CAGR) of 3.8% since 2009, slightly higher than population growth, but at an insufficiently high rate to have a significant impact on the population bed ratio. The number of doctors is estimated to have grown at a CAGR of 2.7% since 2009, reaching 66,555 in 2014. Numbers have grown in line with population growth meaning that the rate per thousand populations has remained at 0.4, which compares to 0.8 doctors per thousand populations in South Africa. Provision of nurses is also limited with 1.5 nurses per thousand populations equal to around 268,000. The number of dentists is extremely low with less than 3,000 registered in 2014.
Despite these recent improvements, Nigeria’s health infrastructure still remains low and insufficient to cater for its growing population. As a result, each year, over 30,000 Nigerians travel to India, the United Arab Emirates, the United States, South Africa and Europe on medical tourism for major treatments such as open heart surgeries, renal transplants, brain surgeries, cancer and eye treatment. An estimated $1 billion is spent on these therapies. Nigeria's health sector contribution to GDP is 5% and the country remains a net importer of medical equipment and prescription medicines. Local production of medical devices is limited to peripheral items such as hospital beds and gurneys. Local pharmaceutical manufacturing companies have the capacity to produce only over-the-counter drugs especially those for treating common cold, malaria and headaches as well as some low end prescription remedies. Prospects exist for U.S. companies largely in the medical diagnostics domain. Magnetic Resonance Imaging (MRI), Computed Tomography scan (CT), Digital X-Ray, Ultrasound, Mammography, ultrasound scans, as well as anesthesia technologies will do well.
Though in 2013, the government announced a zero tariff on imported medical equipment, pharmaceutical manufacturing machinery and packaging materials, industry sources say the legislation has not yet been implemented. A duty rate of 20-25% on medical equipment still applies. Imported drugs attract a 10% rate while 5% is charged on pharmaceutical manufacturing equipment and packaging materials. Nigeria’s healthcare professional associations include: the Nigerian Medical Association (NMA). http://www.nigeriannma.org. Association of General and Private Medical Practitioners of Nigeria (AGPMPN) www.agpmpa.org; Association of Medical Laboratory Scientists of Nigeria (AMLSN), www.amlsn.org, Pharmaceutical Society of Nigeria (PSN) http://www.psnnigeria.org, and the Healthcare Federation of Nigeria (HFN).
According to the International Finance Corporation (IFC), the private sector will be the primary driver of growth as healthcare demand in Africa is projected to grow to $35 billion by 2016.
The best way for U.S. manufacturers and suppliers to penetrate the Nigerian market is by taking advantage of the matchmaking services and programs of the U.S. Commercial Service. We encourage U.S. companies to first seek the assistance of a U.S. Export Assistance Center (USEAC) before exploring opportunities in the Nigerian market. For establishing a presence in Nigeria, we recommend that U.S. firms use agent/distributor relationships with local companies vetted by the U.S. Commercial Service in Nigeria. Contractual terms and conditions must be fully spelt out with local partners and we recommend using the services of an attorney.
Current Market Trends
Consumer health has been gradually growing in the past 5 years due to increasing health awareness. However, many Nigerians still resort to self-medication rather than visit a hospital when in need of medical care. This is largely due to the perceived high cost of hospital treatment. About 61% of Nigerians lived on under $1 a day according to country’s statistics bureau, while 69% of health payments are out-of-pocket according to the health ministry. The rich and wealthy seek specialized care outside overseas because of the dearth of professional medical personnel and dilapidated health infrastructure. Over the years, poor remuneration has forced many healthcare professionals to seek opportunities abroad especially in Europe and the United States. The President of the Association of Nigerian Physicians in the Americas says the number of Nigerian doctors in the U.S. alone is between 4,000 and 5,000. Labor strikes by doctors employed both by federal and state hospitals are a regular feature. Thus, patients are often driven to seek medical attention from private clinics.
Despite these challenges, the Nigerian healthcare sector is expected to grow under the government’s National Strategic Health Development Plan (NSHDP) introduced in 2010. Under the NSHDP, the federal government of Nigeria and its institutional partners plan to spend $26.7 billion in the construction and upgrade of hospitals, diagnostic centers and laboratories, procurement of modern medical equipment and drugs as well as manpower development. The Nigerian Health Insurance Scheme (NHIS) established in 2004 by the Nigerian government as its flagship affordable health insurance institution with the oversight to provide universal health coverage to its citizens, has licensed 60 Health Maintenance Organizations (HMOs). Though most of those enrolled into the NHIS program are public sector employees, private sector organizations and individuals are fast joining. According to the NHIS, about 7.2 million Nigerians have so far been registered. It targets to have 100% of the population insured by 2020. This trend is expected to significantly increase the number of people with access to hospital care and reduce out-of-pocket payments.
A report published by Euromonitor International in May 2014 indicates that independent drug stores remain the major channels of distribution of consumer health products including medicines. Direct selling continues to be a relatively important sales method, which is partly responsible for driving overall growth of consumer health. Internet retailing, however, remains insignificant, although enjoying growth.
According to industry contacts, European products dominate the Nigerian market but China and India, have made significant inroads especially in the pharmaceutical and low end medical devices segment. Asian manufacturers largely employ direct marketing methods and often travel to Nigeria to visit with suppliers and hospitals as part of their business development tactics.
Demand for diagnostic related equipment and technologies such as Magnetic Resonance Imaging (MRI), Computed Tomography scan (CT), Digital X-Ray, Ultrasound, Mammography, ultrasound scans, as well as anesthesia kits and mortuary equipment have increased significantly since the introduction of the National Strategic Health Development Plan (NSHDP). The country’s healthcare priorities which include, polio eradication, maternal and infant care, malaria and tuberculosis control, pandemic influenza prevention and control, non-communicable disease prevention, and Ebola outbreak prevention amongst others, have driven investments in vaccines, drugs and medical facilities by the government, Non-Governmental Organizations (NGOs), multilateral agencies and the private sector. Malaria and tuberculosis constitutes Nigeria’s most prevalent disease burden. World Health Organization (WHO) statistics indicate that nine out of ten deaths which occur in Sub-Saharan Africa (including Nigeria) especially amongst young children and pregnant women are related to malaria. With respect to TB, Nigeria ranks 10th of the 22 high-burden TB countries in the world. Used medical equipment is in high demand especially by small and mid-sized private health clinics, diagnostic centers and laboratories due to their small budgets. Price and after sales support are the most competitive factors when selling to Nigeria.
Most Nigerian pharmaceutical manufacturing companies produce analgesics, cough mixtures and low end prescription drugs and source a reasonable portion of their active ingredients from the United States. With respect to imported medicines, Indian and Chinese products retain controlling market shares while the U.S. with its slice of about 7%, holds the niche market for high end antibiotics, vitamins and some natural products.
The National Agency for Food and Drug Administration and Control (NAFDAC) regulates food and drug products including medical devices while the Federal Ministry of Health supervises the health ministry.
For NAFDAC’s guidelines on medical devices, visit the following link http://www.nafdac.gov.ng/guidelines/medical-devices-guidelines
For guidelines on pharmaceutical products visit http://www.nafdac.gov.ng/guidelines/drug-guidelines . Due to the complications involved in the NAFDAC registration process, U.S. exporters are advised to encourage their Nigerian partners/associates/distributors to directly handle it by themselves. A U.S. company does not need to re-register its already registered product with NAFDAC if it decides to change its local agent or distributor. In this case, the U.S. exporter simply needs to withdraw its power of attorney from its old local representative and give it to its new partner and inform NAFDAC of the change in writing. The Standard Organization of Nigeria (SON) is responsible for compliance with equipment specification and import standards. Importers of drug products and medical devices must first register them with NAFDAC prior to import.
There are no barriers to trade and investments in the healthcare sector. In 2013, the government announced a zero tariff on medical devices and pharmaceutical manufacturing/packaging machinery. However, to date, the new tariff regime has not taken effect. A duty rate of 20-25% on medical equipment still applies. Imported drugs 5-10% rates while 5% is charged on pharmaceutical manufacturing equipment and packaging materials.
Medic West Africa Exhibition & Congress
October 14-16, 2015
Nigeria Pharma Manufacturers Expo
September 7-9, 2015
U.S. Commercial Service Contact Information
Name: Chamberlain Eke
Position: Commercial Specialist
Phone: 234-1- 460-3400 Ext. 3414
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