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The Manufacturers Association of Nigeria (MAN) says it recorded N2.14 trillion of unsold finished goods in 2024, representing a rise from the previous year.
MAN Director-General Segun Ajayi-Kadir, on Monday, disclosed this in the association’s latest economic review report for the second half of 2024.
“The inventory of unsold finished goods surged by 87.5 per cent to N2.14tn in 2024,” Ajayi-Kadir said, blaming “escalating production costs and declining consumer demand” for the development. However, he noted that a half-year decline of 27.9 per cent suggested some improvement in inventory clearance and pricing strategies.
Ajayi-Kadir stated that the food, beverage, and tobacco sector, along with the textile, apparel, and footwear sector, were the worst hit, recording the highest volume of unsold products.
The association linked the situation to the country’s broader economic challenges, including inflation, exchange rate volatility, and the impact of monetary tightening.
According to the report, inflation rose to 34.8 per cent in 2024, significantly squeezing consumer spending and increasing manufacturers’ operational expenses.
MAN said the Central Bank of Nigeria’s increase of the Monetary Policy Rate to 27.5 per cent pushed lending rates to an average of 35.5 per cent, with total finance costs for manufacturers surging to N1.3tn.
“This monetary policy stance limited access to credit and restrained expansion plans across the industry,” Ajayi-Kadir said.
Notwithstanding a marginal improvement in capacity utilisation to 57 per cent, up from 55.1 per cent in 2023, the association lamented persistent structural issues, including unreliable power supply and high energy costs.
Rabiu M. Hamza
Agency News