Manufacturers Association of Nigeria (MAN) comprised 400 Chief Executive Officers (CEOs) of MAN member-companies across the six geo-political zones and Sectoral Groups of the Association has stated has said the Manufacturing inventory of unsold finished products dipped to N224.63 billion in the second half of 2021 from N303.22 billion recorded in the corresponding half of 2020; thus, indicting N78.59 billion or 25.9 percent decline over the period.
However, MAN further explained that it increased by N9.8 billion or 4.6 percent when compared with N214.83 billion recorded in the preceding half. Inventory in the sector totaled N439.46 billion in 2021 as against N577.61 billion recorded in 2020, it added.
Association stated that the decline in inventory in the period under review was attributed to the recovering aggregate consumption following the gradual rebounding of economic activities as COVID-19 pandemic receded.
“The Nigeria economy recorded a growth rate of 4.0 percent in the third quarter of 2021 against 5 percent recorded in the second quarter of the year.
The Manufacturing sector recorded a growth rate of 2.28 percent in the fourth quarter of 2021 which revealed an increase of 3.79 point when compared with -1.51 percent recorded in the corresponding quarter of 2020. However, the sector’s performance contracted by 2.01 point in comparison to 4.29 percent recorded in the preceding quarter of 2021.
The positive performance recorded in the manufacturing sector in year 2021 is attributed to the palliative measures imposed by Government to salvage the sector from the effect of Covid 19 pandemic. Nevertheless, to improve and reposition the sector back as the engine of growth, there is need to maintain those policies and formulate others that will encourage investments especially on the stability of exchange rate, development of local raw materials, protection of lives and properties among others.
The Ameh News has reported previously that the MAN inventory of unsold finished and manufactured goods increased to N303.22bn in the second half of last year, compared to N202.16bn in the corresponding period of 2019.
MAN in the report quoted the association saying the unsold goods increased by N28.83bn, when compared to the N275.39bn recorded in the first half of the year.
The Association further noted that the inventory of unsold manufactured goods in the sector totalled N577.61bn in 2020 as against N402.42bn in 2019.
“The increase in inventory in the period was attributed to the general low consumption and renewed imports in the economy as global economies generally open after months of lockdown,” it said.
It said that electrical and electronic sector group accounted for over 33 per cent of total inventory of unsold manufactured products in the period.
“The group are having challenges of low patronage, high smuggling and products counterfeiting which rubbed off negatively on inventory,” MAN said.
The association said the energy supply to the manufacturing sector increased to 12 hours on a daily basis in the second half of 2020 as against 10 hours daily in the first half.
“Average daily outage had constantly averaged four times per day. However expenditure on alternative energy in the second half of 2020 increased to N57.75bn in the second half of 2020 as against the N34.70bn recorded in the corresponding half of 2019 thus indicating 66.4 per cent increase over the period,” it said.
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With an inventory of unsold manufactured goods standing at N200.26 billion in the first half of last year, manufacturers are screaming blue murder over the delayed passage and implementation of the 2019 budget, which, according to them, largely caused the huge inventory of unsold goods.
The figure, which was contained in the Manufacturers Association of Nigeria (MAN’s) “Executive Summary” of the first half of 2019, represented N51.03 billion (34.19 per cent) increase from N149.23 billion recorded in the corresponding half of 2018.