The value of unsold manufactured goods in Nigeria soared to ₦2.14 trillion in 2024, a sharp rise from ₦1.14 trillion in 2023, according to the Manufacturers Association of Nigeria (MAN).
This marks an 87.5 percent year-on-year increase driven by weakened consumer demand, surging production costs, and shrinking purchasing power.
MAN disclosed this in its Executive Summary of the Economic Review for the Second Half of 2024, released on Monday, April 21.
Despite the worrying year-on-year jump, the report highlighted a 27.9 percent drop in unsold inventory between the first and second halves of 2024, suggesting improved clearance efforts and price adjustments.
“The inventory of unsold finished goods surged by 87.5 percent to ₦2.14 trillion in 2024, driven by weakened consumer demand, escalating production costs, and declining purchasing power.
“However, a half-on-half decrease of 27.9 percent in H2 2024 suggests improved clearance efforts and price adjustments. The Food, Beverage & Tobacco and Textile, Apparel & Footwear sectors faced the most significant increases in unsold stock,” the report stated.
On capacity utilisation, the association noted modest growth.
“Capacity utilisation in Nigeria’s manufacturing sector improved marginally to 57.0 percent in 2024, up from 55.1 percent in 2023. A half-on-half analysis showed a 1.2 percentage point increase in H2 2024 compared to H1 2024.
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“However, persistent challenges such as rising energy costs, forex volatility, and high interest rates constrained further growth.
“Sectoral analysis revealed that Non-Metallic Mineral Products, Motor Vehicle & Miscellaneous Assembly, and Chemical & Pharmaceuticals sectors recorded the highest improvements.”
The review also noted increased reliance on locally sourced raw materials amid foreign exchange constraints and rising import costs.
“This shift was largely driven by forex scarcity, high import costs, and government incentives promoting local content.
“Notable improvements were observed in Wood & Wood Products, Textile, Apparel & Footwear, and Chemical & Pharmaceuticals, while Electrical & Electronics continued to lag due to dependency on imported components,” the report added.
Speaking on the sector’s overall performance, the Director General of MAN, Segun Ajayi-Kadir, said:
“The Nigerian manufacturing sector faced significant hurdles in 2024, including high inflation, forex volatility, surging production costs, and declining consumer demand.
“While some resilience was observed in sectoral performance and increased local sourcing of raw materials, real output remained subdued.
“Moving forward, stabilising macroeconomic conditions, improving energy supply, and ensuring access to affordable financing will be critical for sustaining growth and enhancing industrial productivity.”