Although Nigeria’s healthcare sector has been steadily growing, it remains grossly underserved in the overall economy, said Ugodole Obi-Chukwu, financial analyst and CEO of Nairametrics. .
Speaking on the current state of the healthcare sector during a webinar to discuss the economic challenges of Nigeria’s healthcare sector on the theme “Building Profitable Healthcare Businesses in Nigeria” hosted by the Lagos Business School on Thursday, Mr. The department highlighted that Nigeria’s healthcare sector contributes N1.2 trillion to the global economy. The country’s GDP accounts for approximately 0.7% of the total economy.
“Many people may find it hard to believe, but based on GDP data, Nigeria’s health sector accounts for about 0.7% of the economy,” Ugodre said. “We also rank 24th in the economic sector. If you break it down further, health care ranks 46th or 47th among subsectors in the country.”
One of the most notable trends Ugodre has observed is the consistent growth in the healthcare sector since the start of the COVID-19 pandemic in 2020. “Interestingly, the healthcare sector has been growing every quarter since 2020,” he noted. “We don’t know if there was negative growth during this period. However, in the last quarter it lagged behind the general economy, growing at 2.4% compared to the overall economy’s growth rate of 3.19%.”
Minimal presence on stock exchanges Despite this growth, the sector has minimal representation on the Nigerian Stock Exchange (NGX). “Of the 160 companies listed on the Nigerian Stock Exchange, only seven are healthcare companies,” Ugodre said.
“This is a big question, because if more healthcare companies don’t go public, how are they going to raise the capital they need to further develop this space?”
He explained that one of the major players, GlaxoSmithKline (GSK), recently exited the market, leaving only seven publicly traded healthcare companies. Of these, Ugodole estimated that four of them are strong, meaning they have a market value of at least N2 billion.
“The combined market capitalization of healthcare and pharmaceutical companies listed on the NSE is only N100 billion,” he said. “To put that in perspective, the Nigerian Stock Exchange is worth about 56 trillion naira.So healthcare companies only make up a small portion of that, and in terms of market presence, they still have a lot to offer. It shows that we have a long way to go.”
Ugodre also shared revenue forecasts for the healthcare segment.
“We estimate that healthcare companies listed on the NSE generate revenues of about N110 billion and profits of about N6.5 billion.The sector is growing at a compound annual growth rate of about 23%. However, it is still quite small compared to other subsectors.
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