As growth opportunities continue to move away from traditional pharmaceutical markets and growth patterns in developed markets continue to flatten, many multinational companies (MNCs) like Norvatis, Pfizer, Sanofi, Johnson & Johnson, etc. look toward Africa, including Nigeria for their expanding global footprint.

This is evident following GlaxoSmithKline (GSK) plan to invest over $200million in Africa over the next five years,

expanding manufacturing in Nigeria and Kenya and building five new factories-Rwanda, Ghana and Ethiopia given its attractive long-term growth potential.

With a growing middle class of expected annual disposable income in excess of $1 trillion by 2023, increasing awareness of healthier lifestyles, and a combined Gross Domestic Product (GDP) of $2.9 trillion, rising population growth is emerging as a melting pot for pharmaceutical expansion.

Interestingly, of the four MINT countries (Mexico, Indonesia, Nigeria, and Turkey), Nigeria’s population is projected to outstrip other MINT countries by 2050 with population set to hit 402 million people.

Of the four countries, Nigeria and Indonesia have the most consistent Gross Domestic Product (GDP) at around 6 to 8 percent. The two countries-Nigeria and Indonesia- have the lowest GDPs of the four MINT countries, at $1,555 and $3,557 per capita respectively, compared with $9,749 in Mexico, $10,666 in Turkey, and $51,749 in the United States of America, according to 2012 figures from the World Bank.

While most medicines produced locally consumed domestically, Nigeria is responsible for about 60 percent of medicines consumed in Economic Community of West African States (ECOWAS) by volume, underlining huge sub-regional market, according to Pharmaceutical Manufacturing Group, Manufacturers’ Association of Nigeria (PMG-MAN).

Though estimates of Nigeria’s pharmaceutical market vary significantly, Business Monitor International (BMI) in 2009 put the size of the industry at $600 million. Furthermore, the African pharmaceutical market is anticipated to achieve a year-on-year growth rate of 10.6 percent by 2020, resulting in pharmaceutical sales of $45 billion in 2020.

A report titled “Pharma Emerging Markets 2.0: How emerging markets are driving the transformation of the Pharmaceutical Industry,” revealed that over the past five years, sales generated in emerging markets (Africa, including Nigeria) have doubled, totalling $191 billion in 2011 (representing approximately 20 percent of global market volume)

The report noted that pharmaceutical firms’ top initiatives to drive growth in emerging markets over the next five years include investing in local research, development and manufacturing, building local sales forces as well as close collaboration with governments.

According to the report “Many consider Africa to be the final frontier of emerging markets. The continent is vast, highly diverse, and full of great potential—but it also presents great challenges. Although sub-Saharan markets are currently embryonic, their expected relative increase in importance is significant and not far behind that of Southeast Asia.

“Top executives are already factoring this development into their business plans. While anti-infectives and anti-virals demonstrate strong short-term growth, they will be overtaken by treatments for lifestyle diseases in the long term. The market for oncological products is not expected to grow as fast in Africa as in other regions during the next five years. Partnerships that involve localized brands are very important in Africa.”