ASINT / Macro Strategy
Africa’s medical supplies market is projected to surge from $6.5 billion in 2025 to $11.18 billion by 2031, while West Africa’s in vitro diagnostics market alone is expected to hit $1.388 billion by 2034. The growth trajectory is real. The structural problem underneath it is equally real and has not been resolved by the numbers.
Industry leaders, policymakers and investors warn that the region’s overdependence on imports, estimated at between 70 and 95 percent, remains a major threat to health security, even as local manufacturers operate far below capacity.
The import exposure problem
Africa bears 25% of the global disease burden, including major infectious diseases such as HIV, tuberculosis and malaria, yet it imports more than 95% of the active pharmaceutical ingredients and 70% of the medicines it consumes. This leaves countries vulnerable to supply chain disruptions, price shocks, and unpredictable donor shifts.
The COVID-19 pandemic made this vulnerability impossible to ignore. Major exporting countries including China and India imposed export restrictions to prioritise domestic needs. West African health systems had no buffer. The lesson was absorbed politically. The response has been slow.
The President of the Pharmaceutical Society of Nigeria warned that continued dependence on imports leaves the region vulnerable to global disruptions and the proliferation of substandard drugs. “If we do not produce our medicines, we will continue to import vulnerability,” he said.
FX as the accelerant
The import dependence problem is compounded by currency dynamics that make it structurally worse over time. Markets such as Kenya, Nigeria and Ghana continue to face persistent trade deficits in pharmaceuticals, with negative balances of $500 million, $950 million and $410 million respectively in 2024. Each of those deficits is denominated in hard currency. Every naira depreciation, every cedi correction, every period of FX illiquidity translates directly into medicine price spikes and shortages on pharmacy shelves. The health system absorbs a currency shock that the manufacturing sector does not generate.
Fitch Solutions does not expect countries to significantly increase health R&D spending in the short to medium term, given competing budget priorities, particularly infrastructure development. That constraint reinforces the cycle. Without local production capacity, the import bill stays hard currency. Without hard currency stability, local manufacturers cannot source active pharmaceutical ingredients at predictable costs. The loop is self-reinforcing.
What the localisation push looks like
A 2026 WHX report on building resilient healthcare supply chains in West Africa highlighted initiatives including the African Export-Import Bank’s $75 million support facility for the production of medical devices, vaccines and biologics, alongside Nigeria’s target to increase local medicine production from 30 percent in 2024 to 70 percent by 2030. It also pointed to the role of the AfCFTA in accelerating regional distribution hubs in Nigeria, Ghana and Ivory Coast.
One of the most concrete steps is Emzor Pharmaceuticals’ $23 million investment in a new active pharmaceutical ingredient production facility in Sagamu, Ogun State, Nigeria, set to begin operations in 2026. APIs are the first step in the complex pharmaceutical supply chain, the ingredients that make medicines effective before they are combined into final products.
These are real commitments. They are also insufficient at the current pace relative to the scale of the problem. A $23 million API facility in a region with a $950 million annual pharmaceutical trade deficit in Nigeria alone is a demonstration of direction, not a solution.
What this means for investors
The West African pharmaceutical localisation story is one of the few sectors where the investment thesis, the policy environment and the market need are aligned in the same direction simultaneously. Governments want local production for sovereignty reasons. The AfCFTA creates a regional market large enough to justify manufacturing at scale. The FX argument makes imported alternatives increasingly expensive. And the demographic trajectory guarantees demand growth.
The constraint is not the demand signal. It is the combination of regulatory complexity, API supply chain underdevelopment and the difficulty of competing on price against subsidised generic imports from Asia. For private equity, development finance and strategic investors, the entry point is not final drug manufacturing. It is the input layer: API production, cold chain logistics and diagnostic equipment assembly. That is where the supply chain is most fragile and where the value capture is most durable.