Businesses blame consumers' low purchasing power as unsold goods hit ₦272bn

The Manufacturing Association of Nigeria, (MAN) half-year report of the economy has revealed that apart from the decline of jobs, the inventory of unsold finished products in the sector increased to ₦271.9 billion in the first half (H1) of 2023.

This indicated an increase of 45.4% in unsold finished products compared to ₦187 billion in the corresponding period of 2022.

According to the report, the increase in unsold finished goods during the period in review was a fallout of the CBN’s cash policy in the first quarter of the year, which led to the scarcity of the naira thus creating a weakened consumers’ purchasing power.

The report further fingered the subsidy removal by the FG and the unification of the exchange rate towards the end of the first half as major factors which further eroded investors' confidence in the market.

“As a result, businesses and foreign investors are increasingly wary of committing capital, thereby hindering economic growth and prospects for recovery.

“The combined effect of these is the resultant higher inflationary pressure, which fuels the cost of production, reducing consumers’ purchasing power and having a greater impact on the manufacturers,” MAN stated.

The crisis has further led to an increase in the number of job losses in the sector during the same period in review.

According to the MAN report, about 3,567 jobs were lost in the industry as employment generation dropped to 6,428 in H1, 2023.

The latest figure in employment generation indicated a 32.8% reduction when compared with 9,559 jobs generated in the manufacturing industry in the corresponding period of 2022.