Manufacturers sell below production cost to offload N2trn unsold inventory

The development highlights the difficult operating environment facing manufacturers, who continue to battle soaring production costs, weak consumer demand, high borrowing costs, foreign exchange volatility, poor infrastructure, insecurity, and persistent logistics bottlenecks.

By Yinka Kolawole Manufacturers in Nigeria are increasingly selling products below production cost in a desperate bid to clear nearly N2 trillion worth of unsold inventory, underscoring the severe cost pressures and weak consumer demand confronting the country’s industrial sector.“It is hardly possible for any manufacturer to borrow from commercial banks and still make a profit,” he said Although manufacturers increasingly rely on the Bank of Industry (BoI) and offshore funding where available, Ajayi-Kadir noted that even development finance has become more expensive, with BoI lending rates rising to as high as 15 per cent.