The Manufacturers Association of Nigeria (MAN) has disclosed that the recent increase in product sales across the country’s manufacturing sector is not driven by improved consumer demand but by manufacturers’ efforts to stay afloat amid worsening economic conditions.
Director General of MAN, Segun Ajayi-Kadir, mni, said many manufacturers have been compelled to slash product prices and accept significantly lower profit margins in order to clear growing inventories and keep their production lines operational.
According to him, the manufacturing sector is currently weighed down by nearly ₦2 trillion worth of unsold inventory, forcing many businesses to sell goods at prices that yield little or no profit and, in some cases, below production costs.
Ajayi-Kadir noted that manufacturers continue to face multiple challenges, including rising production costs, weak consumer purchasing power, foreign exchange volatility, inadequate infrastructure, insecurity, logistics bottlenecks, and the high cost of financing.
He added that although many manufacturers are increasing local sourcing and investing in value addition to reduce dependence on imports, the high cost of foreign exchange and import-duty benchmark pricing continue to erode their competitiveness, including under the African Continental Free Trade Area (AfCFTA).
The MAN Director General further lamented that access to affordable financing remains a major challenge. He explained that with the Monetary Policy Rate (MPR) at about 26 per cent, commercial lending rates have climbed to between 30 and 35 per cent, making bank loans largely inaccessible to manufacturers.
He also noted that development finance, which previously attracted single-digit interest rates, now comes with rates of up to 15 per cent, further increasing financial pressure on businesses.
To revive the sector, MAN urged the Federal Government to urgently operationalise the proposed ₦1 trillion Manufacturing Stabilisation Fund, describing it as a critical intervention that would provide affordable financing, enhance industrial resilience, and support the recovery and growth of Nigeria’s manufacturing sector.
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