Yesterday, I mentioned the increase in medical equipment prices I saw at Medic West Africa. In response to that post, I got a request to share my thoughts about the factors driving the increase in medical equipment prices.

Here are 3 factors that I believe are affecting the price of medical equipment in Nigeria.

Depreciation of the Naira

Nigeria imports almost all of its medical equipment. Over the past couple of years, the Naira to USD open market exchange rate (it is almost impossible to get the official exchange rate) has gone from 360 to 700 Naira to 1 USD. As a result, the Naira cost of sourcing medical equipment from the US, EU, and China has increased quite significantly. This is perhaps the biggest reason why medical equipment is getting more expensive in Nigeria.

Increase in Supply Chain Costs

COVID-19 had a huge impact on global supply chains, and we are continuing to feel the effects of this massive disruption to the system. Shipping delays became very common during the pandemic, and even now the global supply chain has not fully recovered. Today it’s more difficult and more expensive both to manufacture and to ship medical equipment than it was in the past, and this added expense gets passed on to the customer. 

Higher Cost of Doing Business in Nigeria

The majority of medical equipment in Nigeria is sold through licensed local resellers and distributors rather than directly by the manufacturers. And, of course, these resellers need to add their own margins to the overall prices of the equipment they sell. In the past couple of years, the cost of doing business in Nigeria has increased (see factor 1), and local medical equipment sellers have needed to raise their prices as a result.