The Nigerian manufacturing sector faced a challenging but resilient economy in 2024, navigating macroeconomic instability, inflationary pressures, and policy-driven disruptions.
The Manufacturers Association of Nigeria (MAN) has revealed that unsold finished goods inventory soared by 87.5% to N2.14 trillion in 2024, citing weakened consumer demand and rising production costs. MAN Director-General Segun Ajayi-Kadir attributed the surge to inflationary pressures, with inflation peaking at 34.8%, eroding purchasing power and increasing operational expenses. The Central Bank’s aggressive monetary policy, raising the MPR to 27.5%, further strained manufacturers’ borrowing capacity, limiting expansion.
Despite a modest 1.7% growth in real manufacturing output to N7.78 trillion, sector performance declined by 3.1% half-on-half due to rising costs and weak demand. Nominal output, however, jumped 34.9% to N33.43 trillion, driven by inflationary price adjustments. Ajayi-Kadir noted improvements in local raw material sourcing, which rose to 57.1%, spurred by forex scarcity and government incentives, though sectors like electronics remained import-dependent.
“The inventory surge reflects escalating production costs and declining purchasing power,” Ajayi-Kadir said, highlighting challenges in consumer-facing industries. The report underscores the manufacturing sector’s struggle with macroeconomic instability, exchange rate volatility, and policy disruptions amid a sluggish economy.
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