MANUFACTURERS STRUGGLE TO SELL ₦2.12TN WORTH OF GOODS AMID WEAK CONSUMER DEMAND

Nigerian manufacturers invested a record ₦4.54tn in the economy in 2025, but finished products valued at about ₦2.12tn remained unsold as consumers struggled with reduced purchasing power. Data from the Manufacturers Association of Nigeria showed that the investment figure represented a 59 per cent increase from the ₦2.85tn recorded in 2024, indicating a significant rise in manufacturers’ capital commitments despite challenging economic conditions. The data also showed that investments in plants and machinery accounted for more than half of the total, reaching ₦2.47tn during the year.

The food, beverage and tobacco sector recorded the largest investment during the period, with ₦1.30tn committed to the sector, while non-metallic mineral products followed with ₦960.44bn. However, the sharp increase in the nominal value of investment was significantly influenced by inflation. When adjusted for inflation, manufacturers’ investment stood at ₦1.33tn in 2025, far below the headline figure of ₦4.54tn. Real investment in plants and machinery increased by only 3.1 per cent to ₦349.17bn, indicating that the increase in naira expenditure did not correspond to a similar rise in the actual volume of productive assets acquired.

The manufacturing sector also recorded substantial pressure from unsold inventory, with finished goods worth approximately ₦2.12tn remaining in stock throughout the year. MAN’s Director-General, Segun Ajayi-Kadir, said the 2025 figure represented a marginal 1.18 per cent decline from the ₦2.14tn recorded in 2024, but noted that the situation continued to reflect difficulties in consumer purchasing power. He said the Food, Beverage and Tobacco Sectoral Group accounted for more than 35 per cent of the total inventory, with unsold products valued at ₦755.8bn, attributing the high level partly to the squeeze on the Nigerian middle class.

Economists said the accumulation of unsold products showed that increased production capacity was not automatically translating into stronger sales. An Abuja-based economist and consultant, Nonso Iheoma, said manufacturers were increasingly producing goods that consumers could not afford at prevailing prices. He explained that prolonged storage of finished products could tie down business capital, increase warehousing costs and put additional pressure on working capital, potentially forcing companies to rely more on bank loans or other short-term financing to continue their operations. The situation also means that manufacturers may struggle to recover their investments where goods remain in warehouses for extended periods.

The weak consumer demand came against the backdrop of high inflation, with Nigeria recording an average headline inflation rate of 23.33 per cent in 2025 based on the rebased Consumer Price Index. The Centre for the Promotion of Private Enterprise urged continued support for domestic production, while MAN proposed measures including a 30 per cent Green Investment tax credit for manufacturers adopting renewable or hybrid energy solutions. The association also called for priority access to direct electricity supply for industrial clusters, expansion of Bank of Industry intervention funds to enable manufacturers refinance expensive loans at lower fixed rates, and the passage of a national industrial policy into law. MAN further advocated measures capable of increasing consumers’ incomes and making locally produced goods more affordable.