Against the backdrop of sustained pressure in the foreign exchange market and high cost of production, the Manufacturers Association of Nigeria, MAN has indicated that inventory of unsold goods is escalating to levels now threatening the existence of companies operating in the production sector of the economy with attendant job losses.
Financial findings show that as of the weekend the foreign exchange market had recorded over 254 per cent plunge in the value of the naira since flotation of the currency by the Central Bank of Nigeria (CBN) in June 2023.
Speaking on the impact of this development on the manufacturing sector, Director General, MAN, Segun Ajayi-Kadir, said: “There are reports that across the board, many warehouses and plants of many manufacturing firms are stockpiled with unsold goods manufactured last year. “The development is as a result of the devastating effects of the exchange rate crisis, inflation, fake and sub-standard goods, smuggling and other macro-economics challenges.
Highlighting challenges in accessing foreign exchange (forex), Ajayi-Kadir disclosed that manufacturers primarily obtain forex through Bureaux De Change (BDCs), noting that banks typically offer less than 20 per cent of the required amount. No respite yet There seems to be no respite in sight as the International Monetary Fund (IMF) has warned that the exchange rate of the Naira may further depreciate by about 35 per cent this year, adding that this could lead to inflation rate peaking at 44 per cent.
