Manufacturers sell below production cost to offload N2trn unsold inventory

By Yinka Kolawole

Manufacturers in Nigeria are increasingly selling products below production cost in a desperate bid to clear nearly N2 trillion worth of unsold inventory, underscoring the severe cost pressures and weak consumer demand confronting the country’s industrial sector.

Findings by the Manufacturers Association of Nigeria (MAN) show that while manufacturers have recorded modest improvements in sales volumes, the gains are largely driven by aggressive price cuts and thinner profit margins rather than any meaningful recovery in consumer purchasing power.

Speaking in an interview, Director General of MAN, Segun Ajayi-Kadir, said many manufacturers have been forced to absorb losses simply to move products and keep their factories operating.

“What has happened is that manufacturers have continued to sell more, not because demand has improved, but because they have taken a hit by lowering prices in order to sell more,” he said.