In a recent economic review, the Manufacturers Association of Nigeria (MAN) has disclosed concerning statistics about the state of the country’s manufacturing sector in the first half of 2023. The report highlights significant challenges facing manufacturers, including a sharp increase in unsold finished products and a substantial loss of jobs.
Rising Unsold Inventory
One of the most striking findings in the report is the dramatic surge in unsold finished products. According to MAN, the inventory of unsold goods shot up by a staggering 45.4 percent year-on-year in the first half of 2023, reaching a total value of N271.96 billion. This figure is a significant increase from N187.08 billion in the corresponding period of 2022. The primary driver behind this surge is the escalating inflationary pressures that have been affecting the Nigerian economy.
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The inflationary pressures have taken a toll on consumers’ purchasing power, leading to a decline in real household income. This, coupled with the scarcity of the national currency, the naira, in the first quarter of the year, and the impact of the government’s subsidy removal, has contributed to the accumulation of unsold inventory.
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Job Losses in the Manufacturing Sector
The grim economic situation has also had a human cost. MAN’s report reveals that 3,567 jobs were lost in the manufacturing sector during the first half of 2023. This represents a notable increase in job losses compared to the same period in 2022 when 1,709 jobs were lost. The situation has worsened from the second half of 2022 when 2,708 jobs were lost.
Segun Ajayi-Kadir, the Director General of MAN, attributes this decline in job creation to an unfavorable business environment stemming from hasty policies and the lingering effects of the currency redesign policy, which led to a shortage of the national currency, the naira.
A Challenging Path Forward
The challenges faced by Nigerian manufacturers, as outlined in MAN’s report, highlight the complexity of the economic landscape in the country. While manufacturers are striving to meet demand, factors such as inflation, currency scarcity, and government policies are creating hurdles.
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