Nigerian manufacturing firms are cutting prices below the cost of production in an attempt to clear nearly N2 trillion in stagnant inventory. This trend highlights the deep struggles within the nation’s industrial sector as companies cope with diminished consumer spending and rising expenses.
Data from the Manufacturers Association of Nigeria (MAN) indicates that recent growth in sales volume is primarily the result of heavy discounting rather than a genuine improvement in the economy. Segun Ajayi-Kadir, the Director General of MAN, explained that producers are intentionally taking losses to maintain factory operations and prevent goods from accumulating further.
The sector is currently burdened by high interest rates, volatile currency exchange, and infrastructure challenges. With commercial lending rates reaching 35 percent, Ajayi-Kadir warned that borrowing for expansion is currently unsustainable. Even development finance through the Bank of Industry has become more expensive, with rates climbing to 15 percent, which places significant pressure on companies that once relied on cheaper capital.
To mitigate these issues, manufacturers are shifting toward local raw materials and value-added production. However, broader competitiveness remains hampered by these systemic costs. MAN has called on the Federal Government to swiftly deploy the N1 trillion Manufacturing Stabilisation Fund to provide the sector with the necessary access to affordable credit.
