By Milcah Tanimu
According to the half-yearly review of the economy released by the Manufacturers Association of Nigeria (MAN) on September 27, 2023, the manufacturing sector has witnessed a significant loss of jobs and an increase in the value of unsold goods.
In the first half of 2023, the manufacturing sector lost approximately 3,567 jobs, representing a 32.8% reduction in employment generation capacity when compared to the same period in 2022, which saw the generation of 9,559 jobs.
The report highlights the adverse effects of an unfriendly business environment, which has been exacerbated by hasty policies and the repercussions of the currency redesign policy that led to a shortage of the naira. The result has been a substantial increase in the value of unsold goods, reaching N272 billion, which signifies a 45.4% rise compared to the previous period. However, this figure also reflects a 4.1% decrease from the inventory value of N283.6 billion recorded in the second half of 2022.
The rise in unsold goods is attributed to factors such as diminishing real household income due to escalating inflation, compounded by naira scarcity in the first quarter of the year and the aftermath of subsidy removal. Additionally, the removal of subsidies and exchange rate unification policies towards the end of the first half have left the economy in a state of uncertainty, impacting investor confidence and hindering economic growth and recovery prospects.
As a result, these challenges have led to higher inflationary pressures, increased production costs, reduced consumer purchasing power, and a significant impact on manufacturers in Nigeria.
