MAN: Manufacturers ended Q1 with N420bn unsold inventory

The Manufacturers Association of Nigeria (MAN) says it has an overall inventory of unsold products worth N420 billion for the first quarter of 2020.

Ambrose Oruche (pictured), MAN acting director-general, told NAN on Saturday that the high amount of unsold inventory may be due to low purchasing power, high cost of production and the ongoing COVID-19 pandemic, which he said had disrupted global market economies.

He suggested that the government should initiate policies that would strengthen the purchasing power of consumers to help reduce the volume of unsold inventory.

This, he explained, would stimulate aggregate demand and deliberately support industries to reduce the production cost of manufactured products in the country.

Oruche also urged the enforcement of executive order 005 that encouraged government preference and patronage of made in Nigeria goods to address challenges of unsold inventory.

“As we know, the government is the biggest spender and if they can enforce the executive order on patronage, the sector will be greatly improved,” he said.

“Nigerians must also learn to have a preference for indigenously manufactured goods compared to smuggled and substandard products that come from abroad.”

Highlighting a positive side of the pandemic, Oruche said Nigerians have been forced to buy local goods on account of the distortion in the global economy.

He said that information emanating from local manufacturers showed that government agencies maintained a penchant for foreign products, even when local substitutes of similar quality were available.

“This means that local patronage increased in the first quarter of the year.

“A lot still needs to be done to ensure that MDAs comply with the order 005 to galvanise industrial productivity through deliberate public spending.”

Oruche also advised sustained implementation of the backwards integration policy to improve local sourcing of raw materials for manufacturing.

This, he explained, was essential to improving the manufacturing sector to deepen industrialisation and economic development in spite of the coronavirus pandemic.

“Also, priority attention must be given to the development of local raw materials in commercial quantity and creating a friendlier environment for investment on the value-chains of these materials that are not locally available at the moment.

“Furthermore, the government needs to involve the private sector operators in the crafting and implementation of adjustment frameworks to deepen the backward integration efforts.