Unsold stock of Nigerian manufacturers grows, driven by weakened consumer demand, escalating production costs
By Jeph Ajobaju, Chief Copy Editor
Unsold manufactured goods in Nigeria rose 87.5 per cent year-on-year (YoY) from N1.142 trillion in 2023 to N2.14 trillion in 2024 amid unprecedented economic hardship across the country that wiped out the middle class and is still reducing the purchasing power of everyone else struggling to stand.
However, the Manufacturers Association of Nigeria (MAN), which disclosed the figures, explained in its Executive Summary of the Economic Review for the Second Half of 2024 (H2 2024) that there was a 27.9 per cent decrease in unsold inventory in H2 2024 versus H1 2024 and capacity utilisation slightly improved YoY.
“The inventory of unsold finished goods surged by 87.5 percent to N2.14 trillion in 2024, driven by weakened consumer demand, escalating production costs, and declining purchasing power,” the report said.
“However, a half-on-half decrease of 27.9 percent in H2 2024 suggests improved clearance efforts and price adjustments.
“The Food, Beverage & Tobacco and Textile, Apparel & Footwear sectors faced the most significant increases in unsold stock.
“Capacity utilisation in Nigeria’s manufacturing sector improved marginally to 57.0 percent in 2024, up from 55.1 percent in 2023. A half-on-half analysis showed a 1.2 percentage point increase in H2 2024 compared to H1 2024.
“However, persistent challenges such as rising energy costs, forex volatility, and high interest rates constrained further growth.
“Sectoral analysis revealed that Non-Metallic Mineral Products, Motor Vehicle & Miscellaneous Assembly, and Chemical & Pharmaceuticals sectors recorded the highest improvements.”
MAN noted that local raw material sourcing by manufacturers increased to 57.1 per cent in 2024, up from 52.0 per cent in 2023.
“This shift was largely driven by forex scarcity, high import costs, and government incentives promoting local content.
“Notable improvements were observed in Wood & Wood Products, Textile, Apparel & Footwear, and Chemical & Pharmaceuticals, while Electrical & Electronics continued to lag due to dependency on imported components.”
MAN Director General Segun Ajayi-Kadir reiterated that “The Nigerian manufacturing sector faced significant hurdles in 2024, including high inflation, forex volatility, surging production costs, and declining consumer demand. While some resilience was observed in sectoral performance and increased local sourcing of raw materials, real output remained subdued.
“Moving forward, stabilising macroeconomic conditions, improving energy supply, and ensuring access to affordable financing will be critical for sustaining growth and enhancing industrial productivity.”
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