Manufacturers cut 3,567 jobs and report N272 billion in unsold goods

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Manufacturers cut 3,567 jobs and report N272 billion in unsold goods
Manufacturers cut 3,567 jobs and report N272 billion in unsold goods

In the first half of 2023, the manufacturing sector in Nigeria experienced significant job losses, with 3,567 jobs disappearing from the industry, according to data from the Manufacturers Association of Nigeria (MAN).

This information was revealed in MAN’s half-yearly economic review, which was released on Tuesday.

The report showed that employment generation in the manufacturing sector declined to 6,428 in the first half of 2023, marking a 32.8 percent reduction in employment generation compared to the 9,559 jobs generated in the first half of 2022.

Manufacturing sector loses 1,855 more jobs

The report also highlighted that 1,855 more jobs were lost in the first half of 2023 compared to the corresponding period in 2022, and 850 more jobs were lost compared to the second half of 2022.

MAN attributed the decline in job creation to an unfavorable business environment resulting from hasty policies and the residual effects of the currency redesign policy, which contributed to a naira shortage.

Furthermore, the report revealed that the inventory of unsold finished products in the manufacturing sector increased to N271.9 billion in the first half of 2023, compared to N187 billion in the corresponding period of 2022.

This represented a significant rise of N84.88 billion, indicating a 45.4 percent increase over the timeframe.

However, there was a N11.64 billion or 4.1 percent decline when compared with the inventory value of N283.6 billion recorded in the second half of 2022.

The report attributed this increase in inventory to the weakened purchasing power of consumers due to diminishing real household income, driven by escalating inflationary pressures, naira scarcity in the first quarter of the year, and the effects of subsidy removal.

The subsidy removal and exchange rate unification policy implemented toward the end of the first half of 2023 left the economy in a state of uncertainty, which had a ripple effect on investor confidence and hindered economic growth and recovery prospects.

The report emphasized that these factors collectively contributed to higher inflationary pressures, increasing production costs, reducing consumer purchasing power, and adversely affecting manufacturers.