Nigeria's pharmaceutical sector is recording a surge in investor interest and commitments, but local manufacturing continues to lag, leaving the country heavily dependent on imports and still far from its 70% local manufacturing target.
The increased investment in Nigeria follows a series of policies and initiatives by the federal government launched in 2023 after multinational pharmaceutical companies such as GlaxoSmithKline and Sanofi ended decades of operations in the country.
Policies include an executive order that waives import duties and taxes on raw materials and equipment required for local pharmaceutical production, initiatives such as the Pooled Purchasing Initiative, foreign exchange market adjustment and the launch of the Presidential Initiative on Unlocking the Healthcare Value Chain (PVAC), which targets 70% local pharmaceutical production by 2030.
They are boosting investor confidence as per the 2025 Joint Annual Review (JAR) health sector report and government data. Although the report shows progress in local manufacturing to reduce import dependence, a key goal of government reforms, has been sluggish.
Local production of medicines and health goods remains at about 38%, meaning Nigeria is still heavily dependent on imports for its health care needs.
According to the report, Nigeria is performing relatively well in the production of ready-to-use therapeutic food (RUTF), with over 11,700 metric tons produced locally. Also, 66 products have shifted from import to local production under NAFDAC's 5+5 policy.
However, local production of other critical health goods is still slow, despite Nigeria having one of the highest malaria burdens in the world, the country has so far produced zero local production of malaria nets.
There has also been no increase in local production of priority tracer medicines, indicating that expanded domestic manufacturing of essential medicines is not being seen.
The report further reveals that Nigeria is not exporting any WHO-prequalified health products
Manufacturers who spoke to BusinessDay said that despite laudable improvements, some age-old hurdles remained, forcing the pharma giants to exit. He cited high operating costs, limited access to credit and expensive borrowing as other reasons, which continue to weigh on local producers.
Chairman of HMA Medicals Limited, Lanre Shittu, said Nigeria remains one of the most expensive environments for pharmaceutical manufacturing.
“Nigeria has the highest cost of manufacturing. The cost of electricity is high, and we were trying to convert all our plants to gas. But the infrastructure for gas is not there. So we still have a very high-cost operating environment. The challenges that were there before have not changed,” he said.
Shittu also pointed to bureaucratic delays, particularly around migrant permits, and the difficulty manufacturers face in accessing finance.
“The Interior Ministry is a mess. Some of us need migrants, some departments have been deployed to try to bring in migrants.
“The Federal Government was making a lot of noise that they are going to increase the amount of money available for loans to manufacturers. And then they came up with N50 billion for manufacturers in Nigeria. A company can use that N50 billion. Some people who have approval at the BOI for loans, even after they get their bank guarantee, they cannot get it”, he said.
Shittu further said, “Credit is the heart of manufacturing and commerce. If you don't have access to credit, even at exorbitant interest rates, you are dead. So it boils down to that.”
President of the Manufacturers Association of Nigeria, Francis Meshioye, agreed that old barriers remain such as high electricity traffic, high operating costs due to poor infrastructure.
According to the JAR report, some of the gaps limiting the sector include non-release of budgetary allocations by the government, which has hindered the implementation of critical supply chain projects.
It further said that structural deficiencies remain across all states, as eleven states have not yet established Drug Management Agencies (DMAs), a key component for effective pharmaceutical governance. Furthermore, sixteen state Central Medical Stores (CMS) remain below pharma-grade standards, limiting their ability to store and distribute medical products safely and efficiently.
However, stakeholders said that while the growing pipeline of investments is promising, they can only translate into tangible benefits, including local production, if reforms are institutionalized and continuity is ensured across successive governments.
According to the 2025 JAR, since the exit of major multinational drug manufacturers, Nigeria has signed at least 10 strategic MoUs with global pharmaceutical companies, technology owners and health partners.
Among the most notable is a deal with Danish healthcare firm Vestergaard, which is to open a new facility for the production of dual-active-ingredient long-lasting insect repellent. Upon completion, the plant is expected to make Nigeria the first country in Africa to manufacture this range of malaria prevention devices locally.
Other agreements include collaborations with Abbott and Wondfo aimed at local production of rapid diagnostic tests, and a partnership with Siemens Healthineers that focuses on domestic manufacturing of ultrasound technology.
Nigeria has also signed a high-profile agreement with US-based Zipline to deploy drone technology for the delivery of vaccines and medical items to primary health centers across the country, the deal was announced on the sidelines of the 79th United Nations General Assembly.
According to the Presidency, in 2024, the country's healthcare sector has attracted more than $4.8 billion in potential investments. In 2025, the Presidency announced a further $2.2 billion in health sector commitments through the Nigeria Health Sector Renewal Investment Initiative.
Shittu, president of HMA Medical Limited, said that although policies like the executive order have brought real benefits, their impact may be short-term unless they are institutionalized and supported by law.
He said that this policy has been beneficial for the makers and has saved crores of rupees for his company.
“As someone who has three manufacturing organizations. The executive order is a good policy. Government policies have been beneficial to us. In our medical device company, in the first three months, in duty, we saved about N342 million. But, you know what an executive order means, right? And that's the problem we have in Nigeria. They are not institutionalizing things,” he said.
He urged, “They should pass all this through the National Assembly so that it can be institutionalized. If the government really wants to move Nigeria forward. Manufacturing is not the most interesting business.”
Anyannu Okechukwu, Group Managing Director of DCL Laboratories, also lauded the reforms, saying they are beneficial to manufacturers, but urged the Federal Government to improve inspection procedures at the country’s ports.
He expressed concern over the persistent misclassification of specialized medical equipment by port authorities, which is disrupting the supply of critical health products.
Okechukwu also expressed concern over the absence of medically trained personnel at ports of entry, which he said has created avoidable bottlenecks for laboratories and healthcare providers, as technical decisions are often taken without adequate professional understanding.
