SECTOR IN NORTHERN NIGERIA
By
Mustapha Muktar, P.hD
mmuktar75@yahoo.com
Department
of Economics
Bayero
University Kano
Introduction
• The
pharmaceutical industry develops, produces, and markets drugs or pharmaceuticals liscensed for use as
medications
• Pharmaceutical companies deal in medications and medical
devices
• They are subject to vareity of laws and regulations
regarding the production, patenting, testing, safety, efficacy and marketing of
drugs.
• Pharmaceuticals are crictical for the health and well
being of populations
Importance of pharmaceutical Industry
• It contributes significantly to any nation’s economy
• It helps in ensuring the health of citizens
• It helps in wealth creation
• It helps in poverty reduction
• It helps in employment creation
• It helps in improving the general well being of the
populace and hence an improvement in the societal welfare
Overview of the Nigerian Pharmaceutical
Industry
• The
pharmaceutical industry in Nigeria is fairly well developed in comparison to most of the other developing countries in
Sub-Saharan Africa
• There
are over 200 local manufacturers, some were affiliated with multinational
companies
• Some of the companies repackage medicines
and/or produce pharmaceutical products from
imported raw materials
• The
existing large market size, strong demand and the need for management of
infectious diseases, especially HIV/AIDS, malaria, TB, and neglected childhood
diseases constitute enormous opportunity for pharmaceutical firms to produce
drugs to meet the health needs of Nigerians.
Investment Opportunities in Northern
Nigeria: The Case of Kano State
• Kano
State is the commercial and investment hub of
Northern Nigeria and the third largest non-
oil and gas economy in Nigeria with an estimated
Gross State Product of $15- 19 billion.
• Its
economy is driven largely by commerce,
manufacturing and subsistence agriculture - which is the dominant activity
• Its
huge population of approximately 12 million
people
would provide enormous market
opportunities and serve as a potential
reservoir of skills
Investment opportunities in Kano State
(Economic factors)
• Large population of approximately 12 million people would provide enormous market opportunities for pharmaceutical products
• potential
reservoir of skills; In terms of population
Kano State is 7% of Nigeria, 13% of
Northern Nigeria and is even bigger than Switzerland,
Singapore and United Arab Emirates( Kano Sate
investors hand book, 2013)
• Gross
State Product of $15- 19
billion.
• Third largest commercial centre in Nigeria
• A pharmaceutical market valued at $ 66 Million (BMI,
2013)
Other
factors ( Financial institutions, airport, railway links, road networks,
industrial estates etc)
Investment opportunities in Kano State
(Medical factors)
• The
growth of the pandemics and increasing
number of people on treatment
• An
improving health insurance and
coverage environment,
and a consequent increase in the number of people with access to healthcare
• An
ageing population leading to increased
prevalence
of old age disorders
• An
increase in lifestyle diseases associated
with growing economic prosperity and urbanization
• Health care reforms, by the state government and
intervention by NGO’s and etc
Kano State
Incentives for Investment
• Availability
of land on concessionary basis for the
construction of both factories and staff
quarters to any investor wishing to invest
in the rural areas
• Long
lease on land for industrial development
• Fast-tracking
the issuance of construction permits
and the registration of property by investors
• Establishment
of Kano One-Stop Investment
Center KOSIC to facilitate ease of
doing business for the investors and etc
Kano State Incentives for Investment (Free Trade Zone)
• Access
to a large Nigerian Market estimated
at about 160 million people
• Nigeria's
membership off Economic Community
of West African States [ECOWAS]
provides access to the West African markets
• Favorable business
environment and strong support
by the
Government to provide sector initiative
through
the government economic reform
agenda that is private sector driven
• Tax incentives
• Customs and Immigration incentives and etc
Challenges Facing Investment in Pharmaceutical Industry
in Kano State
• Inadequate infrastructures which lead to high cost of
production
• Influx of foreign brands into the country
• Low capacity utilization due to low demand and poverty
• Influx of counterfeit and fake drugs
• Undercapitalization/weak financial base
• Upward swing in exchange rate
• High interest rate and comparative cost disadvantage
Concluding
Remarks
• There exist untapped investment opportunites in pharmaceutical industry in Northen Nigeria that if well utilized will respond to the health
needs of Nigerians and will contribute to the overall socioeconomic development of the country and West Africa as well
• Investors need improved infrastructure to enable them produce at low cost so as to compete favourably with the foreign
companies (respective governments should make concerted efforts to improve the
infrastructures)
• Kano State government should enhence and contenue its anti-counterfeiting and illegal marketing measures as it will make the Nigerian manufacturing
companies grow and invest more
• Respective governments should mediate on high interest
rate to enable investors access funds and have strong financial base
• The Investors and state government should collaborate
with educational institutions to embark on research and development for
effecient and profitable investment in the industry
