Nigeria wants to grow its pharmaceutical industry to $10 billion by 2030, a significant leap from the $2 billion it was valued at in 2023. However, despite substantial investments, the local industry is still struggling to leverage Africa's largest consumer market into a significant growth driver.

A June 2025 report from the World Bank, titled “Nigeria: Country Private Sector Diagnostic," notes that Nigeria’s pharmaceutical industry grew an average of 9.1% per year between 2016 and 2023. Drug sales reached $2.03 billion in 2023, accounting for 14.6% of the country’s healthcare spending. Yet, the report states this growth remains fragile because domestic demand is too limited to sustainably support expanded national production. This fragility comes as Abuja aims for 70% local manufacturing of health products by 2030.

Overcoming Low Demand and Limited Health Coverage

To meet these ambitions, demand must be stimulated. Like many Sub-Saharan African countries, Nigerians pay for most of their healthcare out of pocket. Only about 5% of the population has health insurance. This lack of universal health coverage limits medicine purchases and, in turn, discourages manufacturers from investing in new production capacity.

The Nigerian pharmaceutical industry is still expected to grow fivefold over the next five years, reaching $10 billion by 2030. This target was announced last month by the Association of Community Pharmacists of Nigeria (ACPN) and aligns with the federal government’s goal of reducing the country’s reliance on imported medicines.

“Nigeria has 230 million people, and we don’t produce the majority of our health care products. We import 70 percent. How does that make sense?” said Dr. Abdu Mukhtar, national coordinator of the Presidential Initiative to Unlock the Healthcare Value Chain (PVAC), last month. “Our goal is to reverse those numbers and produce 70 percent of health care products locally by 2030.”

According to the World Bank, achieving these goals will require several demand-side actions. One proposed solution is to update the national essential medicines list. This would make the medicines on the list central priorities for Nigerian pharmaceutical manufacturers.

The World Health Organization (WHO) defines essential medicines as those that meet the priority healthcare needs of a population and are intended to be available at all times at prices people can afford. These medicines are typically in constant high demand and can sustainably support local production. The World Bank also recommends using pooled procurement strategies at the local level to further reduce the acquisition cost of these medicines.

Addressing Regulatory and Financial Hurdles

A study published in June 2025 by a researcher at Oye-Ekiti University in Nigeria also confirms the impact of stronger demand on pharmaceutical industry growth. The study highlights a “positive and statistically significant effect” between the percentage of the population with access to essential medicines and the pharmaceutical industry’s contribution to the economy.

“This reflects the importance of accessibility in driving industrial growth and market demand, meaning that, as more people access necessary drugs, domestic production will increase, raising the sector’s GDP contribution,” writes the author, Adeyemi Olayisade.

However, improving medicine access alone will not transform Nigeria’s pharmaceutical industry. Parallel efforts are needed in other parts of the sector. Customs procedures are often unpredictable, which extends clearance times and increases costs. Supply chains suffer from limited access to active pharmaceutical ingredients due to a lack of reliable local suppliers. A shortage of skilled professionals is slowing the sector’s scale-up, while power outages force manufacturers to rely on expensive alternative energy sources, undermining competitiveness.

Regulatory delays and administrative uncertainties also discourage major investments in local production. The registration process for new drugs can take up to 390 days, compared to 210 days in India or 230 in China. Access to financing also remains a major hurdle. Several large pharmaceutical companies have reported needing between $15 million and $50 million each over the next five years to add new production lines or upgrade existing ones.

Emiliano Tossou