The value of unsold goods in Nigeria’s manufacturing sector has skyrocketed to N2.14 trillion in 2024—an alarming 87.5% jump from N1.142 trillion in 2023.
This surge, according to the Manufacturers Association of Nigeria (MAN), is a direct result of dwindling consumer demand, soaring production costs, and the declining purchasing power of Nigerians.
MAN disclosed this in its Executive Summary of the Economic Review for the second half of 2024 (H2’24), released on Monday.
However, the report highlighted a silver lining: a 27.9% decline in unsold goods between the first and second halves of 2024, suggesting that clearance strategies and price adjustments are beginning to yield results.
Sectors most affected by the rising inventory include Food, Beverage & Tobacco and Textile, Apparel & Footwear, which continue to grapple with challenges in clearing stock.
In terms of operational efficiency, Nigeria’s manufacturing capacity utilisation recorded a marginal increase—rising from 55.1% in 2023 to 57.0% in 2024. A closer look shows a 1.2 percentage point boost between H1 and H2 of 2024. Despite this progress, growth was held back by rising energy costs, forex instability, and high interest rates.
On a more promising note, local sourcing of raw materials improved notably, climbing to 57.1% in 2024 from 52.0% in 2023. MAN attributes this shift to forex scarcity, elevated import expenses, and government policies that encourage local content.
Notable gains were seen in the Wood & Wood Products, Textile, Apparel & Footwear, and Chemical & Pharmaceuticals sectors. However, Electrical & Electronics continues to lag due to its heavy reliance on imported components.
Commenting on the report, MAN’s Director General, Segun Ajayi-Kadir, noted, “The sector battled inflation, volatile foreign exchange, and surging production costs in 2024. While there are signs of resilience and a pivot towards local sourcing, output remains subdued.
For the sector to thrive, it’s critical to stabilize the economy, enhance power supply, and ensure manufacturers have access to affordable financing.”
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