In a recent report, the Manufacturers Association of Nigeria (MAN) has revealed that the country’s manufacturing sector has suffered a significant blow in terms of job losses during the first half of 2023. The report, released in a half-yearly review of the economy, paints a grim picture of employment in the sector.
According to the findings, the manufacturing sector generated only 6,428 jobs in the first half of 2023. This represents a worrying 32.8% decrease in employment generation compared to the 9,559 jobs created during the same period in 2022.
Even more concerning is the fact that 3,567 jobs were lost in the manufacturing sector during the first half of this year. This marks an increase of 1,855 job losses compared to the same period in 2022 and an additional 850 job losses compared to the second half of 2022.
MAN attributes this decline in job creation to an unfavorable business environment, which has been exacerbated by hasty policies and the lingering effects of the currency redesign policy that led to a naira shortage.
The report also highlights a significant rise in the inventory of unsold finished products in the manufacturing sector, reaching N271.9 billion in the first half of 2023. This marks a substantial increase of N84.88 billion or 45.4% compared to the same period in 2022. However, it represents a decline of N11.64 billion or 4.1% when compared to the inventory value of N283.6 billion recorded in the second half of 2022.
The increase in inventory is attributed to weakened purchasing power among consumers, driven by rising inflation and the scarcity of the naira in the first quarter of the year, exacerbated by the removal of fuel subsidies.
The removal of subsidies and the unification of exchange rates towards the end of the first half of 2023 have left the Nigerian economy in a state of uncertainty, leading to a decline in investor confidence. This has resulted in higher inflationary pressure, increasing production costs and further reducing consumers’ purchasing power, ultimately impacting manufacturers.
The report underscores the need for concerted efforts to address these challenges and stimulate economic growth and recovery in Nigeria’s manufacturing sector.