…Unsold inventory up 43.5%
…Capacity utilization drops to 49.5%
By Yinka Kolawole
THE total manufacturing investment in Nigeria dropped by 76.11 per cent in 2020 to N118.52 billion from N496.11 billion achieved in 2019, even as unsold inventory increased by 43.5 per cent within the period. The unsold inventory represents total goods manufactured but were not sold.
The Manufacturers Association of Nigeria, MAN, stated this in its executive summary of the economic review of the second half of 2020 made available to Vanguard yesterday.
The report attributed the decline in investment to the depressing fallouts from COVID-19.
It stated: “Estimated cumulative manufacturing investment from 2013 to the 2nd half of 2020 was N5.73 trillion based on data generated from surveys conducted by MAN over the period.
“Manufacturing investment declined to N56.44 billion in the 2nd half of 2020 from N257.66 billion recorded in the corresponding half of 2019; thus, indicating N201.22 billion decline over the period. It also declined by N5.64 billion or 9.1% when compared with N62.08 billion achieved in the 1st half of the year. Manufacturing investment totalled N118.52 billion in 2020 as against N496.11 billion achieved in 2019. Manufacturing investment declined in the period following the depressing fallouts from COVID-19 that gave no impetus for new investments in the sector.”
Meanwhile, according to MAN, unsold inventory increased by 43.5 per cent in 2020 compared to 2019.
“Inventory of unsold manufactured goods in the sector totaled N577.61 billion in 2020 as against N402.42 billion recorded in the 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.
“Electrical and Electronic sectoral group accounted for over 33% of total inventory of unsold manufactured products in period. The group are having the challenges of low patronage, high smuggling and products counterfeiting which rubbed-off negatively on inventory.”
Specifically, MAN stated: “Inventory of unsold finished manufactured goods increased to N303.22 billion in the 2nd half of 2020 from N202.16 billion recorded in the corresponding half of 2019; thus, indicating N101.06 billion or 50% increase over the period.
“It also increased by N28.83 billion or 10.5% when compared with N275.39 billion recorded in the 1st half of the year.”
MAN further disclosed that capacity utilization in the sector averaged 49.5 per cent in 2020 as against 56.8 per cent recorded in 2019.