Manufacturers Association of Nigeria (MAN) in its annual reports for the Annual General Meeting 2019 contained a report of unsold goods in the country’s manufacturing sector stockpile.
With this in place, MAN is raising the alarm that the country’s manufacturing sector is on the verge of another round of economic turmoil, including drifting back into recession unless proactive steps are taken to arrest the situation.
According to the association, the slow pace in 2019 budget implementation among others is already brewing illiquidity coupled with low purchasing power among Nigerians.
MAN noted that information at its disposal from members nationwide showed that there were a lot of inventory of unsold manufactured good stockpiled value, stood at N225.89 billion in the second half of 2018 compared with and N76.66 billion in previous records, which showed an increased of N64.36 billion representing 39.8 percent also representing 51.14 percent from N161.53 billion and N149.23 billion recorded in the corresponding half of 2017 and the first half of 2018 respectively.
Association pointed out that it totaled N375.42 billion in 2018 and N321.12 billion in 2017.high inventory of unsold finished manufactured goods in the period was ascribed to weak demand smuggling, and counterfeiting of Nigeria manufactured product.
Despite continued improvement in the Purchasing Managers’ Index (PMI) within the last few months, local manufacturers have continued to record increase in unsold goods owing to low disposable income by consumers.
Though the PMI grew at a slower rate when compared to 58.5 index points recorded in January, the Central Bank of Nigeria (CBN) said the index stood at 57.1 index points as at February, indicating an expansion in the manufacturing sector for 23 consecutive months.