Manufacturers Association Reports N2.14tn in Unsold Goods, Blames Declining Purchasing Power Under Tinubu’s Administration

The Manufacturers Association of Nigeria (MAN) has raised alarm over the sharp increase in unsold finished goods, which surged to N2.14 trillion in 2024, attributing the troubling figure to weakened consumer demand, rising production costs, and dwindling purchasing power under the current administration.

According to MAN’s latest economic review report for the second half of 2024, the association’s Director-General, Segun Ajayi-Kadir, disclosed that the inventory of unsold goods grew by 87.5 per cent year-on-year—marking one of the most significant spikes in recent history.

“The inventory of unsold finished goods surged by 87.5 per cent to N2.14tn in 2024,” Ajayi-Kadir stated, pointing to “escalating production costs and declining consumer demand” as key drivers of the crisis.

He, however, noted that a 27.9 per cent half-year decline showed modest progress in inventory clearance and pricing strategies.

Sectors hardest hit include food, beverage, and tobacco, alongside textile, apparel, and footwear—industries that recorded the highest volumes of unsold products.

MAN blamed the unsold inventory crisis on the broader economic challenges plaguing the country, including runaway inflation, exchange rate volatility, and a tight monetary policy regime.

In 2024, inflation soared to 34.8 per cent, significantly shrinking consumer spending and inflating manufacturers’ operational costs. The Central Bank of Nigeria’s hike in the Monetary Policy Rate to 27.5 per cent further worsened the situation, pushing lending rates to an average of 35.5 per cent and inflating total finance costs for manufacturers to N1.3tn.

This monetary policy stance limited access to credit and restrained expansion plans across the industry,” Ajayi-Kadir said.

Despite a marginal rise in capacity utilisation—from 55.1 per cent in 2023 to 57 per cent in 2024—MAN lamented persistent structural issues such as unreliable electricity and surging energy costs.

Expenditure on alternative energy sources reportedly jumped by 42.3 per cent to N1.11tn due to frequent national grid collapses and erratic power supply, even though average daily electricity availability improved to 13.3 hours.

He stressed that the disconnect between production and local market demand highlights an urgent need for better alignment, especially through enhanced local sourcing of raw materials and investment in research to reduce dependence on volatile foreign exchange markets.

Real sector output saw only a modest 1.7 per cent increase to N7.78tn, with a 3.1 per cent half-year decline indicating underlying constraints. Additionally, real manufacturing investment plummeted by 35.3 per cent to N658.81bn, as economic uncertainty continues to discourage capital inflows.

The Nigerian manufacturing sector faced significant headwinds in 2024. While there was some resilience in local sourcing and output growth, overall performance was hampered by adverse macroeconomic conditions under the current policy environment,” Ajayi-Kadir said.

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