Nigerian manufacturers recorded N4.54tn in investments in 2025, but finished goods worth about N2.12tn remained unsold as rising prices and declining consumer purchasing power weakened demand.
The figures, contained in data from the Manufacturers Association of Nigeria, show that manufacturers increased their nominal investments by 59 per cent from N2.85tn recorded in 2024, despite persistent economic pressures.
Investment in plants and machinery accounted for N2.47tn of the total, while the food, beverage and tobacco sector led sectoral investments with N1.30tn. Non-metallic mineral products followed with N960.44bn.
However, the sharp increase in nominal investment was moderated by inflation. In real terms, manufacturers’ investment stood at N1.33tn in 2025.
Real investment in plants and machinery rose by only 3.1 per cent to N349.17bn, indicating that the increase in naira-denominated spending did not translate into a similar expansion in the volume of productive assets acquired.
The data also showed growing inventory pressure across the manufacturing sector, with unsold finished goods valued at approximately N2.12tn during the year.
An Abuja-based economist and consultant, Nonso Iheoma, said the buildup showed that increased production was not necessarily translating into higher sales.
“The inventory buildup suggests that manufacturers are producing goods that consumers are increasingly unable to absorb at prevailing prices,” Iheoma said.
He said prolonged inventory accumulation could tie down manufacturers’ working capital, forcing companies to rely more on short-term financing while incurring additional storage and inventory costs.
The development means manufacturers are facing a dual challenge: maintaining investment in production capacity while finding enough consumers able to afford their products.
MAN Director-General, Segun Ajayi-Kadir, said inventory levels remained a major concern, noting that full-year 2025 inventory stood at N2.12tn, a marginal 1.18 per cent decline from N2.14tn recorded in 2024.
He attributed the high inventory levels partly to pressure on the purchasing power of Nigerian consumers, particularly the middle class.
“The Food, Beverage & Tobacco Sectoral Group remained the most heavily impacted, accounting for over 35 per cent of the total inventory at N755.8bn,” Ajayi-Kadir said.
Inflation squeezes household spending
The pressure on consumer demand came amid elevated inflation in 2025. The National Bureau of Statistics’ rebased Consumer Price Index put average headline inflation for the year at 23.33 per cent.
The rising cost of food and other essentials further reduced household purchasing power.
The SBM Jollof Index, for instance, estimated that the average cost of preparing a standard pot of jollof rice for a family of five reached about N25,486 in October 2025.
Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Muda Yusuf, said stronger domestic production remained critical to Nigeria’s economic development.
“The future of economic prosperity lies not in what Nigeria imports, but in what Nigeria produces,” Yusuf said, describing manufacturing as a link between Nigeria’s natural resources and broad-based economic prosperity.
To stimulate further investment, MAN called for a 30 per cent green investment tax credit for manufacturers adopting off-grid renewable or hybrid captive power solutions, including solar and LNG.
The association also urged the Nigerian Electricity Regulatory Commission to prioritise eligible-customer status for industrial clusters to enable them to purchase electricity directly from generating companies through dedicated feeders.
It further proposed expanding Bank of Industry intervention funds to allow manufacturers refinance high-interest commercial loans at fixed rates of between seven and nine per cent for at least 10 years.
MAN also called for the enactment of a Nigeria Industrial Policy Act to make industrial targets and incentives legally binding, while urging measures to increase household incomes and make locally produced goods more affordable.
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