By Mary Onyia
The Manufacturers Association of Nigeria, MAN, has attributed the low appetite for investment in the country to the reduction in the confidence of manufacturers in the economy.
The Director-General of MAN, Segun Ajayi-Kadir in his recent yearly report of the association blamed this incidence to the high cost of plants and machinery made worse by the inflationary trend and the devaluation of the Naira. He noted that the exchange rate of the Naira rose from N 1,535/$ in December 2024 from N907;11/$ in December 2023.
Kadir stated that the fortunes of the manufacturing sector have nosedived following the recent increase in cost of living, adding that over 70 per cent of consumers earning is expended on transportation and energy which has negatively impacted the demand on manufactured products, thereby leading to unsold inventories.
“Additionally, the lack of patronage of locally produced goods, especially by government agencies has contributed to high inventory levels”, he stressed. Consequently, the DG of MAN further noted that the sector witnessed real reduction in real investments in assets in 2024
He states: “The manufacturing sector grappled with a staggering surge in unsold inventory, skyrocketing to N2.14 trillion in 2024 from N1.14 trillion recorded in 2023 indicating 87.72 per cent increase over the period. “However, on half-on-half, the inventory reduced from N1,244.56 billion recorded in the first half to N896.22 billion recorded in the second half, indicating 27.99 percent reduction within the period
He concluded that the decrease in the demand for manufactured goods was due to the drop in the purchasing power of the people, and expressed hope that with the right policy shift, consumers’ confidence in manufactured goods may begin to grow.