Investment in Healthcare
Investment Opportunities in Healthcare
As an important element of national security, public health not only functions to provide adequate and timely medical care but can also trace, monitor, and control disease outbreak. The Nigerian health care had suffered several infectious disease outbreaks year after year. Hence, there is need to tackle the problem. Medical intelligence and surveillance represent a very useful component in the health care system and control diseases outbreak, bioattack, etc.
Health Expenditure:
According to a report by Fitch Solutions, healthcare expenditure in Nigeria is predicted to reach NGN 5,762.061 billion by 2021 growing at a CAGR of 8.35% Y.O.Y. This is up from an estimated NGN 5,318.061 billion in 2020. By 2021, healthcare spending is estimated to make up 2.94% of the country’s GDP. While the government is expected to spend NGN 1,477.77 billion by 2021, the private sector will spend NGN 4,284.469 billion in the same period. This is up from NGN 1,190.71 billion and NGN 3,709.120 billion respectively in 2019.
INVESTMENT OPPORTUNITIES:
It has been estimated that Nigerians spend about $1 billion on medical tourism per annum. Top medical tourist destinations include India, Europe, the United States, the Persian Gulf. There is obviously a ready market of Nigerians seeking high-quality medical care with the requisite purchasing power. Although there are over 130 pharmaceutical companies in Nigeria, only 9 are listed on the stock exchange. Of the total drug consumption in Nigeria, the indigenous pharmaceuticals companies are only able to meet about 45 percent of the demand for drugs. This provides an avenue for import substitution.
The nation’s healthcare is attracting foreign investors that are improving the outlook of the healthcare industry, which many describe as a growth market. Furthermore, there will be possibility of franchise arrangements with some global health care service providers, under which the indigenous company will be the sole local manufacturer of some globally renowned drugs and healthcare products. With a population of more than 180 million, there is a huge gap between healthcare needs and actual provisions, which presents huge opportunities for multinationals with extensive capacity for research and capital for investments.
Besides, the industry has witnessed many landmark changes in recent years, including a law that mandates compulsory health scheme for employees and a step-up in the anti-counterfeit and substandard drugs campaign.
Stakeholders in the healthcare sector and the capital market have agreed that there are immense opportunities in healthcare. At the quarterly sectoral dinner of the Nigerian Stock Exchange (NSE) for the healthcare sector, the Federal Government, NSE, capital market operators and chief executives of healthcare firms brainstormed on the ways the capital market can foster the development of the sector.
- Specialist hospitals,
- Diagnostic and Trauma Centers,
- Ambulance Services,
- Mobile Clinics
- Pharmaceutical manufacturing,
- Smallholder specialist clinics among others.
Several global pharmaceutical and healthcare firms are currently operating in Nigeria. Some of them include:
- Pfizer Global Pharmaceuticals
- Mega Life Sciences
- VitaMedics
- GlaxoSmthKline
- May & Baker
- The country’s large and growing population
- A swelling middle class with the capability to pay for services
- Rising demand for specialty services
- An increase in the incidence of chronic and infectious diseases
- The increase in the rate of non-communicable diseases
- The government’s willingness to plan and partner with private providers
- Numerous investment opportunities in the near term will be in the SME sector
- Economic recovery and policy incentives should create long-term opportunities
- Policy and regulatory projects to expand the use of PPPs in healthcare
- Building and improving the sector’s physical assets
The Nigerian healthcare market is large and diverse. Its value chain comprises of manufacturers, health service providers, medical insurance, retailers, distributors, health financing entities, and medical education providers. There is a need for investment in all these areas but there has been a concentration of investment in multispecialty hospitals, niche healthcare providers, standalone diagnostic facilities and Health Maintenance Organizations (HMOs). As most investors prefer the high financial returns of specialty hospitals and diagnostic facilities, primary healthcare in Nigeria has not seen high levels of investment. Investment in primary healthcare provision can create immense value for both providers and beneficiaries if it can leverage on a large enough population and an associated network of diagnostic capabilities and specialist input.
Source: https://hhbc.in/healthcare-investment-in-nigeria/
Why Nigeria?
Nigeria has enormous resources, most of which are yet to be fully exploited. They include mineral, agricultural and human resources.
Nigeria offers the market in sub-Saharan Africa, with a population of about 180 million people. The Nigerian market potential also stretches into the growing West African sub-region.
The Government has created a favorable climate for business and industrial ventures. Administrative and bureaucratic procedures have been greatly streamlined. The Government has put in place policies and programmes that guarantee a free market economy.
The country has a dynamic private sector, which has assured greater responsibilities under the new economic environment.
Exchange control regulations have been liberalized to ensure free flow of international finance. There is now unrestricted movement of investment capital.
A comprehensive package of incentives has been put in place to attract investment.
There is well-developed banking and financial sector. The investor has easy access to working capital and other credit facilities.
There is an abundance of skilled labour at an economic cost, resulting in production costs, which are among the lowest in Africa.
Rapid development of physical and industrial infrastructure, in terms of transportation, communications, electricity and water supply.