It was gathered that inventory of unsold finished manufactured goods for last year surpassed the N402.42 billion recorded in 2019, hitting N577.61 billion. The hike recorded in 2020 was caused by COVID-19 disruption of economic and business activities.
The pandemic compelled Nigerian government to lockdown their country, thereby, affecting sales of manufacturing goods. Although, in the first half, the inventory was N275.39 billion, but the second half recorded N303.22 billion.
Production value also declined last year, slumping to N4.4 trillion, against the N11.99 trillion recorded during the corresponding period of 2019. Production value dwindled from N7.38 trillion in second half of 2019, to N2.36 trillion in same period of 2020.
But MAN said “it increased by N0.32tn or 15.5 per cent when compared with N2.04tn recorded in the first half of the year. Production value in the sector totalled N4.4tn in 2020 as against N11.99tn achieved in 2019.”
The increase in production value in 2020 second half against the first half is caused by reopening of economy which was mostly closed in the first half of 2020.
Investment Into Manufacturing Drops Amidst Rising Cost
The lockdown also reduced the level of investment into the manufacturing sector, with N118.52 billion pumped into the sector in 2020, against N496.11 billion recorded in 2019, a bi-annual review of the economy by Manufacturers Association of Nigeria (MAN) disclosed.
A further breakdown of investment into the manufacturing sector showed first half of 2020 received N62.08 billion, while N56.44 billion was infused into the sector in the second half of 2020, lower than the N257.66 billion recorded in the same period of 2019.
While investment is dropping, cost of powering production is on the increase in the manufacturing sector despite electricity supply rising from 10hours per day to 12hours per day.
The cost of alternative power supply rose from N24.16 billion in the first half of 2020, to N57.75 billion in the second half of 2020, while the industry had expended N34.70 billion on alternative power in the corresponding period of 2019.