The Manufacturers Association of Nigeria has raised concerns over the rising stockpile of unsold finished goods in 2024, which it said hit N2.14tn amid surging production costs, weak consumer demand, and inflationary pressures.
Director-General of MAN, Segun Ajayi-Kadir, disclosed this in the association’s second half 2024 economic review report released on Monday.
He noted that the inventory of unsold goods jumped by 87.5 per cent year-on-year, although there was a 27.9 per cent drop compared to the first half of the year.
Ajayi-Kadir explained that sectors such as food, beverage and tobacco, as well as textile, apparel and footwear, were the most affected, recording the highest volume of unsold goods.
“The Nigerian manufacturing sector faced significant headwinds in 2024,” he said. “Escalating production costs and declining consumer demand drove the spike in unsold inventories.”
The association linked the situation to broader economic challenges including inflation, exchange rate volatility, and tighter monetary policies.
According to the report, inflation rose to 34.8 per cent in 2024, worsening the erosion of consumers’ purchasing power and pushing up operational expenses.
The Central Bank of Nigeria’s decision to raise the Monetary Policy Rate to 27.5 per cent also pushed lending rates to an average of 35.5 per cent, causing manufacturers’ finance costs to hit N1.3tn.
Ajayi-Kadir said the policy stance limited access to credit and restricted industrial expansion plans.
While capacity utilisation recorded a slight improvement from 55.1 per cent in 2023 to 57 per cent, MAN said manufacturers continued to battle with unreliable power supply and rising energy costs.
Expenditure on alternative energy sources rose by 42.3 per cent to N1.11tn in 2024, the report noted. Though average electricity supply improved to 13.3 hours daily, frequent grid collapses and higher Band A tariffs kept production costs elevated.
Real sector output inched up by 1.7 per cent to N7.78tn, but recorded a 3.1 per cent decline in the second half of the year. Manufacturing investment also slumped by 35.3 per cent to N658.81bn due to worsening economic uncertainty.
MAN called for urgent policy interventions to stabilise the macroeconomic environment, enhance access to affordable financing, and reduce the cost of doing business to avert further decline in the sector
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