Manufacturers Association Decries N1.4tn Unsold Goods in December

Manufacturers Association Decries N1.4tn Unsold Goods in December

President of the Manufacturers Association of Nigeria, Francis Meshioye, has lamented the worsening macroeconomic situation and inflationary burden in the country, which pushed up inventory to N1.4 trillion at the end of last year.

After the first half of the year, it stood at N1.24 trillion and despite expectations for end-of-year sales, the number rose by 13 per cent.

Speaking at a media briefing in Lagos, Meshioye lamented that the country’s manufacturing sector is slowed down by a myriad of macroeconomic and infrastructural challenges that have severely impacted its performance.

“Inflation in Nigeria reached an alarming 34.6 per cent in November 2024, diminishing consumers’ purchasing power and causing a decline in demand for manufactured goods. This also led to an accumulation of unsold inventory across industries.

Naira fell from ₦666/$ in mid-2023 to over ₦1700/$ by mid-2024. This depreciation inflated the costs of imported raw materials and machinery, worsening the already strained profitability of manufacturers.

“Interest rates reached 27.7 per cent by November 2024, substantially raising borrowing costs and making it harder for manufacturers to access financing for expansion and modernisation. The rising interest rates, combined with inflation, severely limited the potential for investment in the sector, impeding long-term growth prospects,” he said.

Pointing out that if Nigeria fails to develop its manufacturing sector, he said it was importing poverty and exporting wealth.

Meshioye said, regrettably, manufacturers were hit hard with a drastic rise in electricity tariffs of over 250 per cent and instead of improved services, have been afflicted with worsening power supply and have to spend more on alternative energy.

“This surge in energy costs became one of the highest operating expenses for businesses in the sector in 2024. As a result, many manufacturers sought alternative energy sources, further straining their financial resources and complicating their ability to remain competitive,” he said.

Speaking, MAN’s Director-General, Segun Ajayi-Kadir, lamented that manufacturers are being ripped off.

“If you claim you are charging a cost-reflective tariff, which costs are you funding? Are you funding incompetence, inefficiency and incapacity or you are just supporting private businesses with government backing? Where in the world is business done the way, our DisCos are doing? If you are in a private business and it is not working out, leave it alone.

“Many businesses have collapsed, others have left the country, many are under-performing because of the economic challenges; others are taking their losses quietly. If the Discos say they are not profitable, they should cut their losses and go and do something else,” he said.