Nigeria is making stronger efforts to increase its indigenous pharmaceutical manufacturing capability. Currently, Nigeria’s large dependence on imported drugs have long exposed it to exchange-rate volatility, fake products and disruptions in global supply chain dynamics.
Medicine security, a concept linking health sovereignty to industrial and economic resilience, is fast becoming central to Nigeria’s development agenda, but despite the renewed political will and the growing private investment, experts warn that achieving full self-sufficiency will require stronger policy coherence, market reforms and infrastructure modernization.
Health sector experts and stakeholders are agreed on one thing: Nigeria must industrialize its pharmaceutical sector as a matter of national security and dignity. The running dialogue among stakeholders has explored three broad themes: regulatory standards, policy and competitiveness, and financing. The conclusion that has emerged from these explorations is that Nigeria must urgently scale up domestic production to cut its 60 per cent dependence on imported medicines.
Coordinator of the Healthcare Value Chain Initiative in The Presidency, Dr. Abdu Mukhtar, has stated that the Tinubu administration, is implementing reforms and financing mechanisms that support the expansion of local pharmaceutical industries. The long-term goal is for Nigeria to produce 70 per cent of its essential health products domestically by 2030. Mukhtar revealed that the initiative includes mobilizing over $2 billion in catalytic financing through partnerships with the African Development Bank and the European Investment Bank. Other components include a specialized training hub designed to close Nigeria’s technical and managerial workforce gaps in pharmaceutical production, and the setting up of a Clinical Trials Consortium to accelerate Research and Development.
A Presidential Executive Order on Local Production was already improving profitability and competitiveness among domestic manufacturers by encouraging procurement from local firms.
There have been agreements and MOUs between various health sector stake holders to foster collaboration across the pharmaceutical manufacturing value chain. The goal is to advance regulatory and policy reforms, expand blended financing options to de-risk private investment, and build institutional capacity for a stronger and more sustainable local industry.
While Nigeria’s pharmaceutical sector has shown gradual progress, import dependence remains high at about 60 per cent. Stock-outs, fluctuating prices and procurement delays continue to undermine access, especially during public health emergencies.
On the regulatory front, Nigeria is making notable progress. The National Agency for Food and Drug Administration and Control (NAFDAC) has advanced toward the World Health Organization’s Global Benchmarking Maturity Level Four, a step that would position the country for vaccine production and global certification. The Pharmacists Council of Nigeria has also digitalized its inspection and licensing processes to improve compliance and fight substandard medicines.
However, regional harmonization remains a challenge. Industry leaders emphasized the need for West African states to align their regulatory frameworks and ease cross-border registration barriers to make exports more viable under the African Continental Free Trade Area (AfCFTA).
Despite these advances, structural challenges persist. Erratic power supply, high logistics costs and expensive raw material imports remain major barriers to competitiveness. Manufacturers also struggle with weak industrial zones, poor research infrastructure and volatile exchange rates, all of which raise production costs.
Healthcare experts have called for low-interest loans, targeted subsidies, and market-shaping tools such as guaranteed offtake agreements to ensure that manufacturers can operate efficiently and at scale.
Analysts at the National Economic Summit Group (NESG) recommend long-term investments be made in upstream sectors such as the production of pharmaceutical-grade raw materials, research facilities and active pharmaceutical ingredients (APIs). Experts in pharmaceutical research have noted that Local API manufacturing is the missing link Nigeria must urgently unlock.
It has been noted that Nigeria has the potential to lead West Africa’s pharmaceutical transformation. Coordinated trade and regulatory alignment could make it a manufacturing hub capable of serving West Africa’s 400 million residents.
It hasn’t gone unnoticed that that public-private partnerships, backed by measurable outcomes, are essential for sustainable progress. Transparency, accountability and long-term collaboration will be crucial in transforming policy into tangible industrial growth.
Background
Nigeria’s pharmaceutical industry, despite its challenges has come a long way from it humble beginnings in the colonial era, where local apothecaries distributed drugs like morphine and quinine, to the over 100 manufacturers we have today. Perhaps a historical tour of the industry’s evolution might serve to elucidate some of its present challenges.
Nigeria’s pharmaceutical industry got its start with the afore-mentioned colonial era apothecaries. These were small were small dispensaries and drug shops established primarily by British colonial administrators and missionaries to serve European settlers and local elites. The apothecaries laid the foundation for Nigeria’s pharmaceutical sector by introducing Western medicine and formal drug distribution systems.
The apothecaries first appeared in the late 19th and early 20th century, particularly in the colonial administration centers of Lagos, Calabar and Ibadan. As previously mentioned, missionaries played a key role in setting them up (alongside churches and schools), in order to offer basic medical care and to distribute imported drugs. In addition to the apothecaries, British colonial hospitals had pharmacies attached to them that were managed by pharmacists or medical officers. These facilities dispensed quinine, morphine, iodine, and other essential drugs for malaria, infections, and pain relief. It is particularly noteworthy that some apothecaries also incorporated local herbal knowledge, thus blending indigenous remedies with Western formulations.
By the 1950s, apothecaries evolved into more formal pharmacies. In the post-independence years between the 1960s and 1980s, the Nigerian government saw the need to embark on a program on industrialization in order to limit the nation’s import dependency on the west for manufactured goods. To this end, it initiated a number of import substitution policies in a number of industries including pharmaceuticals. The policies instituted at the time generally did the following:
- Imposed high tariffs and quotas on imported goods
- Offered tax incentives and subsidies to local manufacturers
- Restricted foreign exchange access for importers
- Encouraged joint ventures between foreign firms and Nigerian entities
The net effect of these policies was to encourage the emergence of domestic pharmaceutical manufacturers like May & Baker, Emzor, Fidson, Neimeth etc. The policies also encouraged foreign firms such as Pfizer, Glaxo (now Glaxo-Wellcome), and Hoechst set up local production plants, often in partnership with Nigerian stakeholders. These policies also had the effect of restricting importation finished pharmaceutical products, especially those that could be produced locally, as a result of the high tariffs imposed. This created a protected market for domestic manufacturers, allowing them to scale operations without immediate foreign competition. Other incentives that the manufacturers received included tax holidays, low-interest loans, access to industrial zones and pharmaceutical training programs.
The Import Substitution programs noted early successes but by the mid-1980s, they began to experience serious setbacks, the oil glut of 1986 in particular. The crises brought on by the glut strained public finances, leading to reduced support for manufacturers as a result. Ultimately the Nigerian government was forced to go to the International Monetary Fund (IMF) for a loan. To as precondition for receiving a loan, the government had to agree to implement what were known as Structural Adjustment Programs (SAPs). These programs reversed many of the gains of the import substitution programs by liberalizing trade, which eased the restrictions on foreign imports. As a result, a lot of domestic firms went under as they couldn’t handle the foreign competition. High production costs, poor infrastructure, and currency volatility were added challenges that led many domestic pharmaceutical manufacturers (and manufacturers in other industries) to close shop.
The 1990s brought more structural decline as the effects of the SAPs and liberalization policies instituted in the 1980s, continued to work their way throughout the economy. In addition to liberalization, the 1990s saw a decent amount of privatization and deregulation. Many state-owned enterprises were sold off, and regulatory oversight weakened. These changes created a hostile environment for pharmaceutical manufacturers, who were already struggling with poor infrastructure and limited access to capital. By the late 1990s, over 70% of medicines sold in Nigeria were imported, reversing gains made during the import substitution era.
In recent times, in a bid to reverse the downturn in the pharmaceutical industry, the government and agencies like NAFDAC have been promoting domestic manufacturing through tax breaks, fast-track approvals, and public-private partnerships. There are also initiatives like the Lekki Pharma Park aim to create clusters of pharmaceutical companies with shared infrastructure and logistics support. We can only hope that these efforts begin to turn the tide in this incredibly vital industry.
