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…Unsold goods hit N2trn
The accumulation of unsold manufactured goods of about N2 trillion is exposing the depth of the demand and cost pressures confronting Nigerian manufacturers, with weak consumer purchasing power, high production and financing costs, energy challenges and the influx of foreign goods combining to leave products on factory shelves for longer periods. While manufacturers have continued to operate despite the difficult environment, industry leaders warn that the buildup of inventory is increasingly tying down capital and swelling storage and distribution costs.
The Manufacturers Association of Nigeria (MAN) said the value of unsold inventory has historically fluctuated between N1.5 trillion and N2 trillion annually, depending on seasonal demand, product cycles and demographic factors.
However, the persistence of high inventory levels amid rising investment raises questions about the ability of businesses to convert production into sales and replenish their capital.
MAN data showed that unsold manufactured goods stood at N2.14 trillion in 2024 and about N2.12 trillion in 2025, even as investment in the sector rose significantly.
While explaining the persistent buildup of unsold manufactured goods in the country, the Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, disclosed that the volume of unsold inventory fluctuates depending on the season and the nature of products, describing it as a “moving target” because some manufactured goods are seasonal while their turnover is also influenced by demographic factors.
According to him, manufacturers have historically recorded between N1.5 trillion and N2 trillion in unsold inventory on average.
Ajayi-Kadir attributed the persistent accumulation partly to the influx of foreign goods, including counterfeit products, as well as genuine products manufactured in countries where production and borrowing costs are significantly lower than those faced by Nigerian manufacturers.
He said the disparity in financing costs placed Nigerian manufacturers at a competitive disadvantage.
“In some economies, people borrow at two per cent, three per cent, four per cent. I borrow at 30 per cent, 35 per cent. So my cost is likely to be higher, and when you import from those environments, you have the advantage in the market. So my own remains on the shelf,” he said.
The MAN chief also identified declining disposable income among Nigerians as a major factor behind the accumulation of unsold goods, saying households were increasingly confronted with competing demands, including healthcare, education and transportation.
He expressed worry that the N70,000 minimum wage remained inadequate to meet rising living costs, thereby limiting consumers’ ability to purchase locally manufactured products.
“There are competing needs. There’s medical, there’s school, there’s transport, and something, not to even talk of how you purchase. So that has tended to leave the goods unpurchased and in the market,” he said.
The development comes amid continued cost-of-living pressures. Nigeria’s Consumer Price Index stood at 146.30 points in August 2026, while headline inflation was 15.39 per cent year-on-year. Food inflation stood at 19.57 per cent, while core inflation was 13.29 per cent.
Ajayi-Kadir said elevated food and energy costs had forced households to devote a larger share of their disposable income to basic necessities, leaving less money available for manufactured goods.
He further cited logistics difficulties and insecurity as factors restricting manufacturers’ ability to distribute products effectively across the country.
According to him, manufacturers could not simply stop production or shut down their businesses despite the difficult operating environment because they had obligations to banks, employees and other stakeholders.
However, he cautioned against interpreting the continued survival of businesses as evidence of healthy resilience, saying declining profitability and erosion of capital were serious warning signs.
“I try to run away from the use of the word resilience, because in a way, some people have tended to use it as if it’s something that we should be proud of. You shouldn’t,” he said.
He added: “You can’t be saying, I’m a very resilient person. You are suffering. Your standard of life is being devalued, yet you are surviving. That cannot be something to glory in.”
The MAN chief warned that continued erosion of manufacturers’ capital could eventually force more companies out of business if corrective measures were not taken.
“If you are prosperous, if your profitability is high before, it can be reduced. And if nothing is done, you will go the way of those who have exited,” he said.
Ajayi-Kadir also stressed the need for manufacturers to pay greater attention to marketing and distribution, noting that continued production without corresponding sales could turn inventory into a liability.
He said manufacturers incur additional costs for warehouse space and storage when products remain unsold, while goods that exceed their shelf life may require regulatory processes and additional expenditure for destruction.
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“What should have generated revenue, strengthened your capital base and improved your bottom line is instead becoming a liability,” he said.
He described unplanned inventory as a serious concern, saying it reflected inadequate patronage from both government and consumers, and urged Nigerians to patronise locally manufactured products.
He also stressed the importance of improving income levels, noting that consumer purchasing power directly affects the ability of Nigerians to patronise locally manufactured goods.
On government patronage, Ajayi-Kadir said MAN had continued to advocate the purchase of made-in-Nigeria products, adding that the principle had been incorporated into the Federal Government’s Nigeria First policy.
The MAN chief also called for closer examination of the relationship between inflation and business inventory, saying changes in inventory levels could provide useful insight into the operating conditions facing businesses.
“There is a relationship between the growth of business inventory and inflation, and we need to examine whether inflation has made it difficult for businesses to maintain persistent inventory levels,” he said.
He cautioned that a decline in inventory levels should not automatically be interpreted as evidence of improved operating conditions.
According to him, keeping inventory at the bare minimum could indicate either that businesses were managing their operations more efficiently or that underlying market conditions were improving.
He said it was, therefore, important to establish which of the two factors was responsible for any reduction in inventory.
Ajayi-Kadir also cited energy costs as one of the persistent pressures facing manufacturers, questioning whether businesses classified under Band A electricity supply were actually receiving reliable 24-hour power and, where they did, whether the cost was sustainable.
He noted that some manufacturers located within industrial zones benefited from dedicated infrastructure and more reliable electricity supply, but said the cost remained a major concern.
“Some people do, almost 24 hours, and they are lucky. Are you located within an industrial zone? Yes, within an industrial zone. If you are getting almost 24-hour electricity, you are among the lucky ones, but what is the cost of that electricity?” he asked.
The MAN chief said higher energy costs, finance costs and other operating expenses continued to put manufacturers under considerable pressure.
He noted that although interest rates might have moderated from their previous levels, borrowing costs remained high for businesses.
“The question, therefore, is whether what we are seeing is resilience rather than an indication that interest rates have fallen sufficiently,” he said.
Ajayi-Kadir observed that even with interest rates around 28 to 30 per cent, the cost of finance remained significant, stressing that the sustainability of businesses must be assessed against persistent pressures from energy, finance and other operating costs.
For MAN President, Francis Meshioye, the relationship between inflation, inventory accumulation and business performance requires closer examination, noting that a decline in inventory should not automatically be interpreted as evidence of improving business conditions.
According to him, businesses keeping inventory at the bare minimum could either be managing their operations more efficiently or responding to difficult market conditions, while persistent energy, finance and other operating costs continue to test the sustainability of manufacturers.
“But our concern is that the issues that have made businesses resilient are still being addressed.
“Apparently, keeping inventory at the bare minimum could indicate one of two things: either businesses are managing their operations better, or the underlying conditions are improving. We need to verify which of these is actually happening and whether things are genuinely getting better.
“Energy costs, for instance, are still rising. What is the cost of that electricity?
“So, when you consider the higher cost of energy, the higher cost of finance and other operating expenses, businesses still have to continue operating under considerable pressure.
“The question, therefore, is whether what we are seeing is resilience rather than an indication that interest rates have fallen sufficiently. Interest rates may no longer be as high as 36 per cent; they may now be around 28 or 30 per cent, more or less. “But that is still a significant cost of finance for businesses.
“So, the issue is about how businesses are sustaining resilience in the face of these persistent cost pressures.
