N2tn goods unsold as consumer spending falls

Nigerian manufacturers invested a record N4.54tn in the economy in 2025, but their products worth N2.12tn remained unsold due to shrinking consumer wallets, according to exclusive data from the Manufacturers Association of Nigeria.

The investment figure represented a 59 per cent increase from the N2.85tn recorded in 2024, pointing to a significant expansion in manufacturers’ capital commitments despite difficult operating conditions.

MAN’s data showed that investment in plants and machinery accounted for more than half of the nominal investment, reaching N2.47tn during the year.

The food, beverage and tobacco sector was the largest contributor, with N1.30tn in investments, while non-metallic mineral products followed with N960.44bn. However, the headline investment growth reveals a significant impact of inflation on the value of capital deployed by manufacturers.

In real terms, manufacturers’ investment stood at N1.33tn in 2025, substantially below the N4.54tn nominal figure.

Real investment in plants and machinery increased by just 3.1 per cent to N349.17bn, showing that the sharp rise in the nominal value of investment did not translate into a comparable increase in the volume of productive assets acquired.

Nominal investment reflects the naira value of expenditure at prevailing prices, while real investment adjusts the value for inflation to provide a clearer indication of changes in actual economic activity and purchasing power.

Unsold goods

The data indicates that the Nigerian manufacturing sector experienced significant inventory pressure in 2025, with the total value of unsold finished goods reaching approximately N2.12tn.

Economists say that the N2.12tn worth of unsold goods shows that production capacity is not necessarily translating into sales.

“The inventory buildup suggests that manufacturers are producing goods that consumers are increasingly unable to absorb at prevailing prices,” said an Abuja-based economist and consultant, Nonso Iheoma.

“For businesses, this means more capital can become tied up in finished goods instead of being converted into cash and reinvested in production.

“It also creates pressure on manufacturers’ working capital. As finished goods remain in warehouses for longer periods, firms may have to rely more heavily on bank credit or other short-term financing to fund operations, while carrying additional storage and inventory costs.”

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On one hand, manufacturers continued to commit substantial resources to plants, machinery and production capacity. On the other, weak consumer demand means the returns from those investments could be constrained if companies cannot sell their output at prices that cover rising production costs.

The data suggest that the central challenge for manufacturers is no longer only the ability to invest or produce, but also the ability of the domestic and global markets to absorb what they produce.

Director-General of MAN, Segun Ajayi-Kadir, said that while the 2025 figure represents a marginal 1.18 per cent decrease from the 2024 full-year figure of N2.14tn, the underlying sectoral shifts reveal a persistent crisis in consumer purchasing power.

“The Food, Beverage & Tobacco Sectoral Group remained the most heavily impacted, accounting for over 35 per cent of the total inventory at N755.8bn. The high inventory levels for the full year 2025 are occasioned by the squeeze on the Nigerian middle class.”

Shrinking wallets in 2025

In 2025, Nigerians saw a very high inflation rate, which eroded people’s purchasing power. Nigeria’s average headline inflation rate in 2025 was 23.33 per cent, based on the rebased Consumer Price Index series used by the National Bureau of Statistics.

As a result, goods were expensive, with many unable to feed or buy basic items. The national average cost of cooking a standard pot of jollof rice for a family of five was approximately N25,486 in October 2025, as tracked by the SBM Jollof Index.

The Chief Executive Officer of the Centre for Promotion of Private  Enterprise, Dr Muda Yusuf, said industrialisation was not merely an economic aspiration but the foundation of economic sovereignty, sustainable prosperity and national competitiveness in the twenty-first century.

He said, “The future of economic prosperity lies not in what Nigeria imports, but in what Nigeria produces. Manufacturing remains the bridge between natural resource wealth and broad-based prosperity. Until that bridge is strengthened, the promise of economic transformation will remain only partially fulfilled.”

In order to encourage more investments in the sector, MAN suggested some measures. One, it encouraged the Federal Government to provide a 30 per cent Green Investment tax credit for manufacturers who transition to off-grid renewable energy or hybrid captive power solutions (Solar/LNG).

It also urged the government to mandate the Nigerian Electricity Regulatory Commission to prioritise Eligible Customer status for industrial clusters, allowing them to buy power directly from GenCos via dedicated feeders.

“There is a need to expand the Bank of Industry (BoI) intervention fund to allow manufacturers to refinance high-interest commercial bank loans at a fixed 7–9 per cent rate for a minimum of 10 years.

“Pass the Nigeria Industrial Policy as an Act of Parliament to make targets and incentives legally binding, preventing arbitrary changes or abandonment by future administrations, it noted, while encouraging measures that would raise the incomes of consumers and make finished goods affordable to Nigerians.–