A new report by BMI, a unit of Fitch Solutions, has warned that the ongoing United States-Iran conflict could significantly disrupt Nigeria’s pharmaceutical supply chain, leading to higher drug prices, delayed imports, and renewed urgency for local drug manufacturing.
The report highlights that prolonged geopolitical tensions in the Middle East are already affecting critical global shipping routes and air cargo hubs, particularly around the Strait of Hormuz, a key artery for international trade.
These disruptions are expected to increase freight costs and extend delivery timelines for essential medicines imported into Nigeria.
Industry data show that Nigeria remains heavily dependent on imported pharmaceuticals, despite a modest decline in import reliance from 70 per cent to 60 per cent, according to the National Agency for Food and Drug Administration and Control. In 2024 alone, the country imported pharmaceutical products worth $947m, with India accounting for about 33 per cent of total supplies.
Analysts warn that disruptions affecting Asia-based manufacturers, particularly in India, could have significant knock-on effects for Nigeria. Global supply chains are already under strain as shipping routes are rerouted and air freight operations across the Middle East face interruptions, driving up logistics costs and complicating delivery schedules.
Experts note that even where supply chains remain functional, rising transportation and insurance costs are likely to be passed on to import-dependent markets. The global pharmaceutical supply chain, which relies heavily on interconnected production and logistics networks, is particularly vulnerable to such geopolitical shocks.
BMI analysts further project that rising freight costs will outweigh any potential gains from improved foreign exchange liquidity driven by higher global oil prices. While Nigeria may benefit from increased oil revenues, the cost of importing medicines—priced in dollars, is expected to rise sharply, worsening affordability challenges for patients.
This is especially concerning given that out-of-pocket spending accounts for a significant share of healthcare expenditure in Nigeria. Industry stakeholders say the combined effect of higher shipping costs and import delays could result in increased drug prices and possible shortages of critical medicines, including antimalarials, antibiotics, insulin, and antiretroviral drugs.
Recent global reports indicate that pharmaceutical supply chains are already experiencing strain due to the conflict, with delays in shipments and rising costs threatening access to essential medicines worldwide.
Local industry players have echoed these concerns. Representatives of pharmaceutical companies and retailers warn that persistent disruptions could trigger a ripple effect across Nigeria’s healthcare system, affecting both availability and affordability of medicines.
Beyond immediate cost pressures, the report underscores deeper structural vulnerabilities in Nigeria’s healthcare supply chain. Heavy reliance on imported finished drugs and raw materials, particularly active pharmaceutical ingredients (APIs) sourced from Asia, leaves the country exposed to external shocks.
In response, the report notes that the crisis is likely to accelerate calls for the localisation of pharmaceutical manufacturing in Nigeria. The Federal Government has already introduced measures aimed at boosting domestic production, including tax incentives, import duty waivers on manufacturing equipment, and financing support through development institutions.
Regulatory efforts by National Agency for Food and Drug Administration and Control to strengthen Good Manufacturing Practice (GMP) standards, alongside funding initiatives from institutions such as the Bank of Industry, are also expected to support local capacity development.
However, significant challenges remain. Analysts point to persistent structural constraints, including unreliable power supply, high production costs, and continued dependence on imported raw materials, as key barriers to scaling up domestic pharmaceutical manufacturing.
Despite these hurdles, BMI maintains that the current global disruption presents both risks and opportunities. While import-dependent business models face increasing pressure, companies with local manufacturing capabilities, or those willing to invest in domestic production, could gain a competitive advantage.
Overall, the report concludes that the ongoing US-Iran conflict is not only a short-term supply shock but also a critical test of Nigeria’s pharmaceutical resilience, reinforcing the need for long-term strategies aimed at reducing import dependence and strengthening local production capacity.
US-Iran Conflict Threatens Nigeria’s Drug Supply, Import Costs – Report is first published on The Whistler Newspaper
