Inventory of unsold completed products in the manufacturing sector increased by 45.4 percent in the first half of 2023 (H1’23) to N271.96 billion from N187.08 billion in the corresponding period of 2022 (H1’22), despite 3,567 job losses over the period, due to growing inflationary pressures.
The Manufacturers Association of Nigeria (MAN) noted this in its First Half of 2023 Economic Review, adding that the situation was exacerbated by the shortage of naira in the first quarter of the year (Q1’23) and the aftermath of the federal government’s subsidy elimination.
However, the inventory position improved as compared to H2’22, when inventory value of N283.6 billion was reported, suggesting a N11.64 billion or 4.1 percent drop in the prior quarter.
According to the report:
“The inventory of unsold finished products in the manufacturing sector saw a significant increase to N271.96 billion during the first half of 2023, as compared to N187.08 billion recorded in the corresponding period of 2022. This indicates a substantial rise of N84.88 billion or 45.4 percent over this timeframe. “However, there was an N11.64 billion or 4.1 percent decline when compared with the inventory value of N283.6 billion recorded in the second half of 2022.
“This increase in inventory can be attributed to a weakened purchasing power of the consumers, brought about by diminishing real household income resulting from the ongoing escalation of inflationary pressures, compounded by the scarcity of naira in the first quarter of the year and the aftermath of the subsidy removal.”
Meanwhile, a total of 3,567 jobs were lost in the manufacturing sector in H1’23, reflecting an increase of 1,855 job losses over the similar period in 2022 (H1’22), and an increase of 805 job losses over the 2708 jobs lost in H2’22.
Segun Ajayi-Kadir, Director General of MAN, blamed the surge in employment losses to an adverse business climate and hurriedly executed policies such as the aftermath from the naira redesign, which resulted in a scarcity of currency notes in the first quarter of the year.
He stated:
“The decline in the number of jobs created in the sector during the period further highlighted the unfriendly business environment resulting from the hasty policies and residual effect of the currency redesign policy that led to naira crunch.”
cc: Vanguard Ng
