Despite economic headwinds, investment in the country’s manufacturing sector increased to N192.89 billion in the first half of 2023 from N178.39 billion recorded in the corresponding half of 2022.
This indicated a N14.50 billion or 8.1 per cent increase over the period and further increased by N47.3 billion or 32.50 per cent when compared with N145.59 billion recorded in the second half of the year.
In its half year executive summary of the economy from January to June 2023, the Manufacturers Association of Nigeria, MAN, attributed the increase in investment in naira value to the currency devaluation which saw naira depreciated to N901/$ or 65 percent depreciation at the Investor and Export Window from N462/$ before the devaluation policy of the CBN was announced.
Hence, the increase recorded does not indicate physical investment by manufacturers but rather nominal which resulted from the devaluation of currency that has made the manufacturers to pay more for plants and machinery importations.
Unfortunately, the Association disclosed that inventory of unsold finished products in the manufacturing sector saw a significant increase to N271.96 billion during the first half of 2023, as compared to N187.08 billion recorded in the corresponding period of 2022.
This indicates a substantial rise of N84.88 billion or 45.4 percent over this timeframe. However, there was an 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 Association attributed the increase in inventory to a weakened purchasing power of the consumers, brought about by diminishing real household income resulting from the ongoing escalation of inflationary pressures, compounded by the scarcity of naira in the first quarter of the year and the aftermath of the subsidy removal.
According to MAN survey, employment generation of the manufacturing sector declined to 6428 in the first half of 2023.
This is an indication of 32.8 per cent reduction in employment generation capacity when compared with 9559 jobs generated in the first half of 2022.
Also, the data showed a shed of 313 jobs when compared with 6741 jobs created in the second half of 2022.
The decline in the number of jobs created in the sector during the period further highlighted the unfriendly business environment resulting from the hasty policies and residual effect of the currency redesign policy that led to naira crunch. In the same vein, a total of 3567 jobs were lost in the first half of 2023, indicating 1855 more job lost when compared with the 1709 job lost in corresponding half of 2022 and 850 more jobs lost when compared with 2708 jobs lost in the last half of 2022.