Nigeria’s healthcare sector, though growing steadily, remains significantly inadequate in the broader economy, according to financial analyst and CEO of Nairametrics, Ugodre Obi-Chukwu.
Speaking on the state of the healthcare sector, at a webinar discussing Economic challenges in Nigeria’s healthcare sector under the theme ‘Building a profitable healthcare business in Nigeria organized by Lagos Business School on Thursday, he highlighted that the sector contributed N1.2 trillion to the country’s GDP, accounting for approximately 0.7% of the overall economy.
“Many people find it hard to believe, but based on GDP data, Nigeria’s healthcare sector as a percentage of the economy is about 0.7%,” Ugodre said. “We are also ranked 24th among economic sectors. When you break it down further, healthcare ranks 46th or 47th among the country’s subsectors.”
One of the most notable trends Ugodre observed is that the healthcare sector has experienced consistent growth since the COVID-19 pandemic, which began in 2020. “Interestingly, the healthcare sector has grown every quarter since 2020,” he noted. “I’m not sure we’ve seen any negative growth in that period. However, in the last quarter, it lagged behind the general economy, growing at 2.4% compared to the overall economy’s 3.19%.”
Minimal presence in the stock exchange
Despite this growth, the sector’s representation on the Nigerian Stock Exchange (NGX) is minimal. “Out of the 160 companies listed on the Nigerian Exchange, only seven are healthcare-related,” Ugodre remarked.
“This is a major issue because if we don’t have more healthcare companies listed, how will they raise the capital needed to develop the sector further?”
He explained that one of the major players, GlaxoSmithKline (GSK), recently exited the market, leaving just seven listed healthcare companies. Of these, Ugodre estimated that four are solid, meaning they have a market valuation of at least N2 billion.
“The total market capitalization of healthcare and pharmaceutical companies listed on the NSE is just N100 billion,” he said. “To put that in perspective, the Nigerian Stock Exchange is valued at about N56 trillion. So, healthcare companies account for just a tiny fraction of that, indicating a long way to go in terms of market presence.”
Ugodre also shared revenue projections for the healthcare sector.
“We estimate that the healthcare companies listed on the NSE will generate about N110 billion in revenue, with a profit of N6.5 billion. The sector has been growing at a compounded annual growth rate of about 23%, but when you compare it to other subsectors, it’s still quite small.”
