The manufacturing sector has decried the surging inflation rate which is making many products unaffordable as the manufacturers’ inventory of unsold finished goods rose by 45.4 percent in one year.
According to the Manufacturers Association of Nigeria’s (MAN’s) latest half-yearly review report, “the inventory of unsold finished products in the manufacturing sector saw a significant increase to N271.96 billion during the first half of 2023, as compared to N187.08 billion recorded in the corresponding period of 2022. This indicates a substantial rise of N84.88 billion by 45.4 percent over this timeframe”.
“This increase in inventory can be attributed to a weakened purchasing power of the consumers, brought about by diminishing real household income resulting from the ongoing escalation of inflationary pressures, compounded by the scarcity of naira in the first quarter of the year and the aftermath of the subsidy removal.”
Meanwhile, a total of 3,567 jobs were lost in the manufacturing sector in H1’23, representing an increase of 1,855 in job losses when compared with the 1709 jobs lost in the corresponding period in 2022 (H1’22), and an increase of 805 jobs lost when compared with 2708 jobs lost in H2’22.
While commenting on the review, Segun Ajayi-Kadir, Director General, MAN, attributed the increase in job losses to the unfriendly business environment and hastily implemented policies such as the fallout of the naira redesign leading to the scarcity of currency notes in the first quarter of the year.
“This inflationary pressure was further exacerbated by the scarcity of the Nigerian currency in the first quarter of the year and the consequences of subsidy removal,” he added.
The ‘Half Yearly Review of the Economy’ provides a summary of the findings from MAN’s survey of the manufacturing sector for the first half of 2023.
The report was drafted with the primary aim of monitoring changes in manufacturing sector performance indicators vis-à-vis the behaviours of the macroeconomic and policy environment during the survey period.
The key manufacturing indicators under scrutiny encompassed capacity utilization, production value, inventory levels, utilization of local raw materials, investment, expenditure on alternative energy sources, and more.