Manufacturing investment in Nigeria decreases by 76%

Obinwannem News Manufacturing investment in Nigeria decreases by 76%

A drastic declination was witnessed in the home investments from manufacturers, in 2020, by 76.11 percent. ₦118.52 billion from ₦496.11 billion was achieved in 2019; even as unsold inventory increased by 43.5 percent within the period.  The unsold inventory represents total goods manufactured but were not sold out

Manufacturers Association of Nigeria, (MAN) stated this in its executive summary of the economic review of the second half of 2020.

The report stated that the decline in investment was due to the COVID-19 pandemic.

It stated: “Estimated cumulative manufacturing investment from 2013 to the 2nd half of 2020 was ₦5.73 trillion based on data generated from surveys conducted by MAN over the period.

“Manufacturing investment declined to ₦56.44 billion in the 2nd half of 2020 from ₦257.66 billion recorded in the corresponding half of 2019; thus, indicating ₦201.22 billion decline over the period. It also declined by ₦5.64 billion or 9.1% when compared with ₦62.08 billion achieved in the 1st half of the year. Manufacturing investment totalled ₦118.52 billion in 2020 as against ₦496.11 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.

“Inventory of unsold manufactured goods in the sector totaled ₦577.61 billion in 2020 as against ₦402.42 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(s) 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 ₦303.22 billion in the 2nd half of 2020 from ₦202.16 billion recorded in the corresponding half of 2019; thus, indicating ₦101.06 billion or 50% increase over the period.

“It also increased by ₦28.83 billion or 10.5% when compared with ₦275.39 billion recorded in the 1st half of the year.”

MAN further revealed that capacity utilization in the sector averaged 49.5 percent in 2020 as against 56.8 percent recorded in 2019.

Ifesinachi Nnabugwu reporting, Obinwannem News