The bi-annual economic review of the Manufacturers Association of Nigeria shows that the drop in purchasing power of Nigerians for Nigerian manufactured goods was worsened by the cash crunch that hit the economy in the first quarter of 2023.
According to Vanguard, analysis of the report shows that the rise in inventory is despite a 9.7 percent decrease in the manufacturing sector factory output to N6.67 trillion in 2022 from N7.39 trillion in 2021.
The director general of MAN, Segun Ajayi-Kadir, added that the total value of unsold items increased to N469.66 billion in 2022 from N384.58 billion in 2021.
“The Naira Redesign program, which started in the latter quarter of 2022, worsens this situation. The withdrawal of a significant amount of “old Naira” without a corresponding replacement with “new notes” caused the economy to experience a cash shortage, leaving households all around the country very stranded.
“Inventory of unsold finished products increased to N282.56 billion in the second half of 2022 up from N169.75 billion recorded in the corresponding half of 2021; indicating 66 percent increase or N112.81 billion over the period.
“In the second half of 2022 as the cost of wheat and other food inputs increased; prices of fuels, particularly diesel rose by over 50 percent.
“This really affected the manufacturing sector adversely as it was tough to sell most of the Fast-Moving Consumer Goods and other commodities in that period.”
He called on the government to formulate and implement a national policy to address the country’s current high inflation.
The MAN President, Francis Meshioye also added that the manufacturing sector’s struggle with sales is mainly attributable to the sustained naira scarcity.
