Manufacturers in Nigeria are sounding the alarm over a mounting crisis in the sector. According to MAN, finished goods lying unsold across the industry have reached alarming levels, attributed to weak consumer purchasing power, rising production costs and what many characterize as inadequate patronage of domestically produced items by government agencies.
“Over 70 per cent of consumer income is now allocated to transportation and energy expenses, negatively impacting demand for manufactured products. Additionally, the lack of patronage of locally produced goods, especially by government agencies, has contributed to high inventory levels.” — Segun Ajayi‑Kadir, DG, MAN.
Key Challenges
Sharp rise in unsold inventories: MAN reports unsold finished goods rose to around ₦1.24 trillion in 2024’s first half. Later data indicated a full-year figure of about ₦1.4 trillion.
Low government procurement of local goods: A report of the 22nd Nigerian Economic Summit noted:
“Government as the major spender in the economy does not sufficiently patronise local manufacturers despite the Procurement Act, as preference is for foreign brands.”
Operating cost headwinds: Manufacturers face high inflation, steep energy tariffs, inflation-driven raw‐material cost spikes, currency devaluation, multiple taxes and regulation burdens.
Weak domestic demand: With consumers spending large portions of income on transport, power and living costs, less remains for manufactured goods, adding to inventory build-up.
Implications
The combination of large unsold inventories and low off-take from major institutional buyers (including government) threatens the viability of domestic manufacturing. This has implications for job creation, value-addition, import substitution and the broader industrialisation agenda. As MAN notes, without a boost in demand—especially from large government contracts—the sector remains under-utilised.
What needs to be done
Industry stakeholders urge the government to:
Prioritise procurement of “made-in-Nigeria” goods by ministries, agencies and parastatals.
Stabilise the macroeconomic environment (inflation, exchange rates, power tariffs) to restore manufacturing competitiveness.
Ease financing costs, rationalise taxation and streamline regulatory processes.
Restore consumer confidence and demand through targeted stimulus and support for local manufacturers.
