News Story
The Nigerian manufacturing sector showed resilience in 2024 despite facing significant challenges, including high inflation, forex volatility, and declining consumer demand. According to the Manufacturers Association of Nigeria (MAN) Economic Review, capacity utilization improved marginally to 57.0 percent, while real manufacturing output increased by 1.7 percent year-on-year to N7.78 trillion.
However, the sector faced headwinds, including rising production costs, high interest rates, and unreliable energy supply. Manufacturers’ expenditure on alternative energy sources surged to N1.11 trillion, a 42.3 percent increase from 2023.
According to Segun Ajayi-Kadir, Director General of MAN, the sector’s real manufacturing output increased modestly by 1.7 percent year-on-year to N7.78 trillion, buoyed by increased activity in Motor Vehicle & Miscellaneous Assembly, Non-Metallic Mineral Products, and Electrical & Electronics.
However, a half-on-half decline of 3.1 percent in real production reflected rising costs and weak consumer demand. Nominal manufacturing output rose sharply by 34.9 percent to N33.43 trillion, primarily due to inflationary pressures and rising domestic prices.
The manufacturing sector’s local raw material sourcing increased to 57.1 percent in 2024, up from 52.0 percent in 2023. This shift was largely driven by forex scarcity, high import costs, and government incentives promoting local content.
Notable improvements were observed in Wood & Wood Products, Textile, Apparel & Footwear, and Chemical & Pharmaceuticals, while Electrical & Electronics continued to lag due to dependency on imported components.
The inventory of unsold finished goods surged by 87.5 percent to N2.14 trillion in 2024, driven by weakened consumer demand, escalating production costs, and declining purchasing power.
However, a half-on-half decrease of 27.9 percent in H2 2024 suggests improved clearance efforts and price adjustments. The Food, Beverage & Tobacco and Textile, Apparel & Footwear sectors faced the most significant increases in unsold stock.
