The Manufacturers Association of Nigeria (MAN) has reported that 3,567 jobs were lost in the manufacturing sector in the first half of 2023. This represents a 32.8% reduction in employment generation capacity compared to the same period in 2022.
The report also states that the inventory of unsold finished products in the manufacturing sector increased to N271.9bn during the first half of 2023, compared to N187bn in the corresponding period of 2022. This indicates a substantial rise of N84.88bn or 45.4% over the timeframe.
MAN has attributed the increase in inventory to a weakened purchasing power of 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.The report also notes that subsidy removal and exchange rate unification policy towards the end of the first half left the economy on the brink of uncertainty, caused a ripple effect that further eroded investors’ confidence.
MAN states that, “As a result, businesses and foreign investors are increasingly wary of committing capital, thereby hindering economic growth and prospects for recovery.
“The combined effect of these is the resultant higher inflationary pressure, which fuels the cost of production, reducing consumers’ purchasing power and having a greater impact on the manufacturers.
”The loss of jobs and increase in inventory of unsold finished products in the manufacturing sector are worrying trends that could have a significant impact on the Nigerian economy. The government needs to take urgent steps to address the challenges facing the sector, such as inflation, high cost of production, and weak purchasing power of consumers.