Nigeria Medical Devices Market

Medical Device Market Forecast
Date: June 29, 2019

Latest Updates
We maintain our forecast in local currency terms and project that the market will grow at a 2017-2022 CAGR of 13.5% which should see it rise to NGN75.1bn by 2022. The market will benefit from an improved outlook for the economy which will continue to see a cyclical upswing, driven by higher crude oil prices and increasing investor sentiment. However, ongoing threats to security and social stability in the run up to the 2019 presidential election pose risks to the recovery.

We maintain our forecast in US dollar percentage terms and project that the market will grow at a 2017-2022 CAGR of 9.0% to reach USD184.4mn by 2022. The lower US dollar rate reflects ongoing currency weakness with the naira set to continue on its downward trajectory against the US dollar over the forecast period. That said, the market will return to growth in 2018 after three successive annual contractions and will see mainly high single-digit to low double-digit growth between 2019 and 2022.

Structural Trends
The market will benefit from key drivers:

Strong fundamentals: second largest economy in Africa with a growing middle class; and pro-reform government committed to strengthening the healthcare system.
Healthcare drivers: the world's seventh largest population exceeding 185mn; the National Health Insurance Scheme that is expected to improve healthcare services over the long term; the National Health Bill, which will generate funds and act as a catalyst for health sector improvements; the World Bank's USD500mn credit for maternal and child health; and public private partnerships, including the Lagos Medical Park project.
Market drivers: continuing reliance on imports to supply almost all the market; and government moves to introduce a patent regime that complies with the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights.

Market growth will be constrained by:

Weak fundamentals: rising Islamic militancy in northern states; continued tension in the oil-producing south east; uncertain economic prospects; a vulnerability to global oil prices; currency depreciation; widespread corruption; and the autonomy of state governments hindering the implementation of national policies.
Healthcare barriers: a chronically under-funded healthcare sector with one of the world's lowest levels of per capita health expenditure; inadequate health budget; a reliance on foreign aid; the slow implementation of universal health insurance; the chaotic management of public healthcare services; a shortage of healthcare personnel in rural areas; and the tendency for wealthier Nigerians to seek medical treatment abroad.
Market barriers: a very low level of medical device expenditure exacerbated by the weak naira; widespread corruption making regulatory enforcement difficult; and the lack of meaningful patent legislation or pricing & reimbursement system.
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