Nigeria’s pharmaceutical sector has spent much of the last decade reacting to shocks, Naira devaluations, FX scarcity in 2016 and again in 2020, COVID-era export bans on raw materials from India and China, and most recently the foreign exchange constraints imposed by the Central Bank of Nigeria on Form M applications for finished pharmaceutical products. Each shock exposes the same vulnerability: an estimated 70 per cent of medicines consumed in Nigeria are imported, and over 70 percent of the active pharmaceutical ingredients used by local manufacturers come from India and China. In May 2021, Vice-President Yemi Osinbajo launched the Presidential Initiative for Unlocking the Healthcare Value Chain (PVAC), in part to address this. Two years on, Lucky Ilodigwe, a medical biochemist by training who now advises pharmaceutical clients, health regulators, and development partners on strategy, in an exclusive conversation with Pharmanewsonline, speaks on why Nigeria’s roughly 70 per cent pharmaceutical import dependence is a structural problem, and what a credible path to local resilience actually looks like.
Let’s start with the headline number. PMG-MAN and NAFDAC have both referenced the 70 per cent import figure for years. Is the situation improving, or are we standing still?
The honest answer is that it depends on which segment you are looking at. For oral solids, paracetamol, antimalarials, common antibiotics, antihypertensives, local manufacturers like Emzor, Fidson, May & Baker, Swiss Pharma and a handful of others have built real capacity. Emzor’s paracetamol API plant in Sagamu, which broke ground in 2018 and is expected to be one of the few backward-integrated API facilities in sub-Saharan Africa once fully commissioned, is a genuine inflection point. But for biologics, vaccines, oncology products, and most patented therapies, we are essentially 100 percent import-dependent. So the aggregate 70 per cent number masks a much sharper bifurcation. We have made progress in the easy categories and almost none in the hard ones.
The CBN’s FX restrictions on pharmaceutical imports in 2020 and 2021 were partly framed as a way to push backward integration. From where you sit, did that policy do what it was supposed to do?
It did two things, and they pulled in opposite directions. On one hand, it sent a clear signal that finished imports would no longer enjoy preferential FX access, and that did concentrate the minds of local manufacturers and a few importers who started exploring local toll manufacturing arrangements. On the other hand, the same manufacturers still need FX to import APIs, excipients, packaging materials, and equipment. So, you had a situation in late 2021 where local producers were being squeezed at both ends, restricted access to FX for inputs, and a Naira that had depreciated meaningfully against the dollar. A policy that punishes imports without simultaneously fixing the input-side bottleneck transfers the pain to the very producers it is trying to protect. The lesson is not that the CBN was wrong to act. It is that pharmaceutical industrial policy cannot be run from one institution in isolation.
You have advised across this value chain. What is the single most under-appreciated constraint?
Power, and what it does to unit economics. A WHO-prequalified production line cannot tolerate the kind of voltage fluctuations we see on the grid, so every serious manufacturer runs on diesel or gas backup for a large share of operating hours. I have seen cost structures where energy alone accounts for between 25 and 40 percent of conversion cost, depending on the dosage form. When you compare that against an Indian competitor operating on reliable grid power and benefiting from production-linked incentives under their PLI scheme for bulk drugs, the playing field is not level, and no amount of tariff protection fully closes that gap. This is why I tell clients that the conversation about local manufacturing competitiveness has to start with industrial infrastructure, not with the factory itself.
The PVAC initiative under the Vice-President’s office identified roughly 120 priority medicines for local production. Is that the right framing?
The list itself is a useful disciplining exercise, it forces government to be specific about what ‘local production’ means in practice. But a priority list without aligned procurement is just a document. The Federal Ministry of Health, the National Health Insurance Authority, state-level drug procurement agencies, and the major development partner programmes, Global Fund, GAVI, UNICEF, PEPFAR, together represent a very large share of guaranteed off-take in this market. If those buyers commit to multi-year purchase agreements for specific products on the PVAC list, with clear volume floors, local manufacturers can finance capacity expansion against that demand. Without that, we are asking private capital to take both market risk and policy risk simultaneously, and that is too expensive. Emzor’s UNICEF and Global Fund supply relationships for antimalarials are a small but instructive proof point, predictable institutional demand changes what is bankable.
Talk about regulation. NAFDAC has made meaningful reforms under Professor Mojisola Adeyeye, including moves toward WHO Maturity Level 3. How does that connect to resilience?
It connects directly. A regulator at ML3 is one whose decisions are trusted by other regulators, by WHO prequalification programmes, and by the institutional buyers I just mentioned. That trust is the entry ticket to export markets and to donor-funded procurement. Nigeria reached ML3 for vaccine regulation in 2022, which is a real achievement and one that should be defended and built on. But the same maturity needs to extend across therapeutics, biologics, and medical devices. And the GMP inspection backlog, the timelines for new product dossiers, the predictability of variation approvals, these are operational questions that determine whether a manufacturer can plan a five-year capacity investment or not. Regulatory science capacity is not glamorous, but it is foundational.
AfCFTA came into force in 2021, and Nigeria signed the African Medicines Agency treaty in 2022. Do these continental frameworks actually help?
They help if we use them. The economic logic for African pharmaceutical manufacturing has always been frustrated by scale, no individual country, with the partial exception of South Africa, has a market large enough on its own to justify a competitive bulk API plant or a fill-finish vaccine facility. The African Union’s Partnerships for African Vaccine Manufacturing target, 60 percent of vaccines used on the continent to be made in Africa by 2040, is only credible if regulatory harmonisation through the AMA allows a product approved in Nigeria to move freely into Ghana, Kenya, Senegal, and so on. AfCFTA gives us the trade architecture; the AMA gives us the regulatory architecture. Nigeria, with its market size and its existing manufacturing base, is well-positioned to anchor regional production hubs, but only if we modernise our own systems fast enough to lead rather than be bypassed.
There is a recurring debate about whether Nigeria should focus on APIs, on finished formulations, or on biologics. What is your view?
It is a sequencing question, not an either-or. The economically rational path is to deepen formulation capacity first, because that is where we have a base to build on, then move selectively into APIs for the highest-volume molecules where backward integration genuinely improves resilience, paracetamol, certain antimalarial APIs, a handful of antibiotics. Biologics is a different conversation entirely. Biologics require fill-finish capability, cold chain integrity, and technology transfer partnerships of the kind that Aspen in South Africa secured with Johnson and Johnson for COVID-19 vaccines, and that Biovaccines Nigeria Limited, the joint venture between the federal government and May and Baker, was set up to pursue. We should be honest that biologics manufacturing at scale in Nigeria is a fifteen to twenty year project. That does not make it less important. It makes it more important to start with realistic milestones.
Counterfeit and substandard medicines remain a persistent issue. How does that intersect with the resilience question?
It intersects in a way that is not always recognised. Every time a patient cannot find their hypertension medication at a familiar price, or a procurement officer cannot source a reliable supply through the formal channel, the open market fills the gap. And the open market is where the bulk of substandard product circulates. So unreliable supply is not just an access problem, it is a quality problem, because it pushes demand into unregulated channels. NAFDAC’s Mobile Authentication Service and the work to formalise distribution through coordinated wholesale centres in Lagos, Onitsha, and Kano are important, but they sit on top of a supply system that is too easily destabilised. Resilience and quality are two sides of the same coin.
Financing. The Bank of Industry has a pharmaceutical intervention fund, and the CBN has run several health-sector facilities. Is access to capital really the binding constraint?
It is a binding constraint, but not the only one and increasingly not the most important one. There is patient capital available, from BoI, from the African Development Bank’s pharmaceutical financing facilities, from development finance institutions like the IFC and Proparco, and increasingly from impact-oriented private equity. The constraint is the pipeline of investable opportunities at the right scale. A local manufacturer seeking to upgrade to WHO-prequalified standard needs five to fifteen million dollars in equity-like capital, paired with technical assistance, paired with offtake certainty. Assembling those three things in one transaction is hard, and it is the assembly that is missing, not any one ingredient. This is where strategy advisory, development partners, and government coordination genuinely matter.
Talent. You trained as a medical biochemist before moving into strategy. Is the talent pipeline adequate?
The undergraduate and graduate pipeline in pharmacy, biochemistry, microbiology, and chemical engineering is large by African standards. The gap is in industrial pharmaceutical skills, formulation scientists with GMP experience, quality assurance professionals trained to ICH standards, regulatory affairs specialists who understand both NAFDAC and stringent regulatory authority requirements, and bioprocess engineers. These are roles you learn in a working facility, not in a classroom. Programmes like the West African Postgraduate College of Pharmacists, partnerships between universities and manufacturers, and structured rotations through development partner programmes can help. The Nigerian pharmaceutical diaspora, particularly in the United States and the United Kingdom, is also a resource we have barely begun to mobilise systematically.
If you had to identify three things that would meaningfully change Nigeria’s trajectory in the next five years, what would they be?
First, a binding multi-year procurement commitment from federal and state buyers for a defined basket of PVAC priority medicines, structured so that local manufacturers can finance against it. Second, full operational alignment between NAFDAC, the Federal Ministry of Health, the CBN, and the Federal Ministry of Industry, Trade and Investment, so that FX policy, regulatory timelines, and industrial incentives stop contradicting each other. Third, a serious push on the two or three pieces of shared industrial infrastructure that would transform unit economics: reliable power at pharmaceutical industrial parks, a national bioequivalence testing centre at international standard, and a regional fill-finish facility positioned to serve West and Central Africa. None of these three things are technically complex. They are coordination challenges.
A final question. You have used the word ‘resilience’ throughout this conversation rather than ‘self-sufficiency.’ Why?
Because self-sufficiency is the wrong goal. No health system on earth makes everything it consumes, and pursuing autarky in pharmaceuticals would make Nigerians worse off, not better. Resilience is different. Resilience means we can absorb a shock, an FX crisis, a pandemic, an export ban from a supplier country, without patients losing access to essential medicines. It means we have enough domestic capability in the categories that matter most, diversified import relationships for everything else, and institutions strong enough to coordinate a response when conditions change. That is an achievable goal. And it is the right one. The countries that have built genuinely strong pharmaceutical sectors, India, Brazil, Bangladesh, increasingly South Africa, did it over thirty to forty years with consistent policy through multiple political cycles. Nigeria has the market, the talent, and the manufacturing base to do the same. What we need now is the discipline to stay with the plan.
