N2.12trn Goods Remain Unsold As Nigerians Cut Spending

Nigeria’s manufacturing sector is facing a demand crisis, with about N2.12 trillion worth of finished goods remaining unsold in 2025, as households cut back on spending amid rising prices and shrinking real incomes.
The figures, from the Manufacturers Association of Nigeria (MAN) Bi-Annual Review, showed unsold inventories increased to N2.12 trillion in 2025, despite a sharp rise in production output to N21.04 trillion.
The growth in inventory was attributed not to increased capacity alone, but to weak consumer demand as inflation, subsidy removal and exchange rate adjustments eroded purchasing power.
For many consumers, the reality is simple: incomes have not kept pace with prices.
Mrs. Abimbola David, a school teacher and mother of three, said her household has reduced purchases of processed foods and toiletries by half.
“Before, I buy carton of noodles and detergent for the house. Now I buy small sachets, and only when necessary. Our salary is still the same but prices have doubled,” she said.
A trader Mrs. Joan Iheonu said sales of locally-manufactured goods, including plastics, soaps and packaged foods, have slowed drastically.
“Customers will come, ask price, and go. They say no money. Even those that have money prefer to buy foodstuff first. Factory goods are now luxury,” she said.
A professional, Michael Adeola said he has switched to cheaper, unbranded alternatives or postponed purchases. “I used to buy branded shirts and shoes made here. Now I manage what I have. If you remove transport and feeding, nothing remains for other things.”
Manufacturers has linked the over N2.12 trillion stock of unsold products in 2025 to low demand from consumers and expensive production conditions.
They explained that Nigerians are buying less because inflation has weakened their spending power, while manufacturers are grappling with high costs of energy, forex and borrowing.
According to the director-general, MAN, Segun Ajayi-Kadir, many companies are now disposing of goods below their production cost just to create space in warehouses and raise cash for operations.
He said the marginal sales growth seen in some quarters does not mean people are buying more, but that producers are making heavy price sacrifices.
The outgone president of MAN, Francis Meshioye, added that even though the value of manufactured goods rose to N21.04 trillion in nominal terms, actual output in real terms dropped significantly, from N2.62 trillion in 2023 to N1.32 trillion in 2024 due to inflation.
MAN said the huge inventory, estimated at N2.12 trillion, is locking up funds that manufacturers need for raw materials and expansion, calling on government to boost consumer incomes, reduce interest rates, ensure stable power and forex, and prioritise locally made products.
The association urged government to accelerate the ‘Nigeria First Policy’ to strengthen domestic value chains, promote local sourcing of raw materials, reduce import dependence and create stronger demand for locally manufactured goods.
The director/CEO of Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, noted that weak consumer purchasing power continues to weigh on demand for non-essential products.
“It depends on what segment of the market you are in. In some segments, because of weak purchasing power and declining discretionary income, consumers are prioritising their spending,” he explained.
He added that “generally, consumer purchasing power remains weak due to inflation and that has changed the dynamics of demand in the economy.
“So if a product does not fall into the essential category, it will be affected by the drop in purchasing power. But for products that are essential, whether for infrastructure, food, and other basic needs those products are still doing better.
“It depends on the segment. That is what will determine whether a manufacturing company is experiencing a drop in demand or growth in business.”
Corroborating the view, the chief economist at Proshare, Teslim Shitta-Bey, said the inventory build-up may be seasonal rather than a sign of collapse in demand.
“First quarter sales are usually low for most companies. Business activities are typically slow in Q1. What matters is whether there is a disruption to the trend,” he said.
According to him, from my experience with manufacturing companies, Q1 inventories are usually high. They typically start to come down in Q2 and Q3, and fall further in Q4 when demand picks up ahead of Christmas.
“I believe what we are seeing is basically a cyclical issue. Admittedly, effective demand has been challenged by inflation. But inflation has also been decelerating to 15.43 per cent. That means effective consumer income should have improved marginally.”