Naira’s Devaluation Drives Drug Import Expenses To N900bn

Naira’s Devaluation Drives Drug Import Expenses To N900bn....KINDLY READ THE FULL STORY HERE▶

The persistent depreciation of the naira is poised to keep drug prices soaring in 2024, potentially surpassing N900bn for pharmaceutical imports. This escalation is anticipated to exacerbate the challenges faced by Nigerians already grappling with elevated drug costs in 2023. Data from the International Trade Center reveals that Nigeria imported pharmaceutical products worth $1.05bn in 2022, translating to N475.17bn at the exchange rate of N451/$ prevailing at that time. However, with the current exchange rate of N902.45/$ as of February 19, 2024, the projected cost is estimated to surge to N950.81bn……...CONTINUE READING

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Citing information from the International Trade Center, the article emphasizes that pharmaceutical products encompass a broad spectrum beyond drugs. These include various therapeutic or prophylactic substances, medicaments with multiple constituents, and medical, surgical, dental, or veterinary preparations. The primary sources of Nigeria’s pharmaceutical imports are India, China, Malaysia, Netherlands, and Belgium.

The article notes a consistent rise in Nigeria’s pharmaceutical imports above the $1bn threshold since 2019. The figures stood at $1.45bn in 2019, $2.84bn in 2020, $1.37bn in 2021, and $1.05bn in 2022. Projections for 2024 indicate a further increase, spurred by the strategic shift of certain foreign drug companies to focus on importation this year.

In August 2023, GlaxoSmithKline Consumer Nigeria Plc announced plans to cease its operations in the country, transitioning to a third-party direct distribution model for pharmaceutical products. Similarly, in November 2023, French pharmaceutical multinational Sanofi revealed its intention to exit Nigeria, adopting a third-party distribution model from February 2024. Since these announcements, drug prices have surged by over 100%, attributing the rise to Nigeria’s escalating inflation and foreign exchange crisis, impacting businesses and consumers alike. Boladele Silva, a pharmaceutical professor at the University of Lagos, emphasized the industry’s vulnerability to shocks arising from foreign exchange volatility in an interview with SBM Intelligence.

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