Foreign Exchange Management Challenges Facing Import-Dependent Pharmaceutical Firms in Lagos

This study investigates the foreign exchange management challenges facing import-dependent pharmaceutical companies in Lagos, Nigeria, with a focus on how these challenges affect the availability and affordability of essential medicines. Nigeria's pharmaceutical sector relies heavily on imported active pharmaceutical ingredients, packaging materials, and medical equipment, making it acutely sensitive to foreign exchange volatility and availability. The persistent gap between official and parallel market exchange rates, combined with import restrictions on certain categories of goods, has created significant operational uncertainty for pharmaceutical firms. The study adopts a survey research design and collects data from 80 procurement and finance managers in pharmaceutical manufacturing and distribution companies headquartered in Lagos through structured questionnaires. Descriptive statistics and regression analysis are employed to analyse data. The theoretical framework draws on the resource dependency theory and the financial management literature on currency risk. The study examines how firms manage foreign exchange exposure through forward contracts, multiple sourcing strategies, and engagement with different banking channels. It also investigates the downstream effects of forex challenges on drug prices and stock-out frequencies in retail pharmacies. Findings are expected to reveal that forex management difficulties are a primary driver of medicine shortages and price escalation, with disproportionate impacts on low-income consumers. Recommendations are directed at regulators, commercial banks, and the pharmaceutical industry on developing coordinated forex access solutions for essential medicine importers. Keywords: foreign exchange, pharmaceutical imports, drug availability, Lagos, currency risk