Fitch Solutions, a financial intelligence provider, has forecasted that the naira may fall to around N1,993 per dollar by 2028, posing significant challenges for Nigeria’s pharmaceutical industry in importing medical devices.

In a recent report, BMI Research, a subsidiary of Fitch Solutions, noted that despite the anticipated economic recovery, Nigeria’s medical devices market would likely continue to encounter operational and demand-related difficulties in the short term.

Fitch projects that Nigeria’s medical device market will expand at a compound annual growth rate (CAGR) of 10.8% from 2023 to 2028 in local currency terms and 9.6% in US dollar terms, reaching an estimated market value of NGN171.1 billion (USD344.7 million) by 2028.

The report highlights that increasing healthcare spending focused on universal health coverage, alongside Nigeria's large population and the dual burden of chronic and infectious diseases, will sustain strong demand for medical devices, particularly diagnostics, consumables, and hospital equipment, in the short to medium term.

Citing Sanofi and GlaxoSmithKline as examples of companies that exited Nigeria due to naira devaluation, the report noted that the ongoing currency depreciation would drive up the cost of importing medical devices and diminish consumer purchasing power. Fitch’s subsidiary also indicated that, despite government incentives, significant obstacles still prevent local manufacturing of medical devices from gaining momentum in Nigeria.

The report stated: “Continued weakness of the naira will increase medical device import costs and erode consumer purchasing power. Similar to other markets in sub-Sahara Africa, Nigeria heavily relies on medical device imports, with a reliance of over 95%. We expect that the naira will end 2028 at NGN1993/USD from NGN306/USD in 2018."

The report highlighted that as the naira depreciates, the cost of importing medical devices will keep rising, which will weaken both the healthcare system and patient's ability to afford essential medical technologies, particularly given the underfunding of the public health sector.

However, on the export side, a weaker naira could boost the competitiveness of locally manufactured medical devices, supporting growth in the sector. Tinubu's attempt to manage the naira Years of economic mismanagement have left Nigeria facing a severe shortage of dollars.

The country’s economy has long relied on oil exports while maintaining a high demand for imported goods, creating an unstable foundation.

In an effort to address this issue, President Bola Tinubu relaxed long-standing foreign exchange controls shortly after assuming office in May 2023.

As a result, the naira, previously maintained at an artificially strong rate against the dollar, has depreciated by around 70%. Tinubu aimed to attract foreign investment and enhance Nigeria’s appeal as an investment hub.

In the short term, however, this shift led to a spike in inflation, reaching a 28-year high, and intensified a cost-of-living crisis that sparked deadly protests in Africa’s most populous nation.