By Chibuzor Alli
Nigerian manufacturers had about N2.12tn worth of finished goods left unsold in 2025 as shrinking consumer purchasing power weakened demand, even as companies increased investment in production capacity, data from the Manufacturers Association of Nigeria has shown.
The manufacturers invested a record N4.54tn in the economy during the year, representing a 59 per cent increase from the N2.85tn recorded in 2024.
However, the sharp rise in investment did not translate into a similar increase in real productive capacity or sales, highlighting the pressure facing manufacturers from inflation and weak consumer demand.
MAN’s data showed that investment in plants and machinery accounted for more than half of the nominal investment, reaching N2.47tn in 2025.
The food, beverage and tobacco sector recorded the highest investment at N1.30tn, followed by non-metallic mineral products with N960.44bn.
In real terms, however, manufacturers’ investment stood at N1.33tn, substantially below the N4.54tn nominal figure.
Real investment in plants and machinery increased by only 3.1 per cent to N349.17bn, indicating that the increase in the nominal value of investment was largely influenced by higher prices.
Nominal investment reflects the naira value of expenditure at prevailing prices, while real investment adjusts for inflation to provide a clearer picture of changes in actual economic activity and purchasing power.
Manufacturers face growing inventory pressure
The data showed that manufacturers faced significant inventory pressure in 2025, with unsold finished goods valued at approximately N2.12tn.
Economists said the inventory buildup indicated that production capacity was 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.”
Manufacturers continued to commit substantial resources to plants, machinery and production capacity, but weak consumer demand could constrain the returns from those investments if companies are unable to sell their products at prices that cover rising production costs.
The data therefore points to a challenge beyond production capacity, with manufacturers also facing difficulties in getting domestic and international markets to absorb their output.
Director-General of MAN, Segun Ajayi-Kadir, said that while the 2025 inventory figure represented a marginal 1.18 per cent decrease from the 2024 full-year figure of N2.14tn, sectoral trends showed continued pressure on 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.”
Inflation squeezes consumer spending
Nigerians faced high inflation in 2025, eroding purchasing power and making goods and basic necessities more expensive.
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.
The pressure was also reflected in food costs. The national average cost of cooking a standard pot of jollof rice for a family of five was approximately N25,486 in October 2025, according to the SBM Jollof Index.
The Chief Executive Officer of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, said industrialisation was fundamental to economic sovereignty, sustainable prosperity and national competitiveness.
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.”
MAN seeks measures to boost manufacturing
To encourage further investment in manufacturing, MAN called for measures to reduce production costs and improve consumers’ purchasing power.
The association proposed a 30 per cent Green Investment tax credit for manufacturers that move to off-grid renewable energy or hybrid captive power solutions, including solar and 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 through 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.
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