Ogun Manufacturers Lament N350bn Unsold Inventory Amid Economic Pressures

Manufacturers in Ogun State have raised concerns over the mounting inventory of unsold goods, valued at an estimated ₦350 billion. The Manufacturers Association of Nigeria (MAN) attributed the alarming situation to reduced consumer purchasing power, high production costs, and dwindling demand for locally manufactured products.

Causes of the Inventory Crisis

1. **Declining Consumer Spending**: The rising cost of living, driven by inflation currently at 33.88%, has left many consumers prioritizing essentials over discretionary purchases. This has significantly reduced demand for industrial goods and services.
2. High Production Costs: Manufacturers are grappling with increased energy costs, high exchange rates for imported raw materials, and elevated transportation expenses, which have driven up product prices, making them less competitive.
3Market Saturation: Some sectors, particularly Fast-Moving Consumer Goods (FMCGs), are experiencing market saturation, leading to slower turnover rates.

Impact on Manufacturers

The accumulation of unsold inventory is creating financial and operational difficulties for businesses in the state:

– **Cash Flow Issues**: Businesses are facing liquidity constraints, which are affecting their ability to pay wages, settle debts, and finance operations.
– **Reduced Production**: Many manufacturers have slowed down production to manage stock levels, which has ripple effects on employment and supply chains.
– **Storage Costs**: The need for additional storage space to house unsold goods is adding to operational costs.

### Manufacturers’ Plea

Ogun-based manufacturers are calling for urgent government intervention to address the crisis. Among their demands are:

– **Policy Support**: Tax incentives and subsidies to reduce the financial burden on manufacturers.
– **Access to Affordable Credit**: Easier access to low-interest loans to help manufacturers manage cash flow and sustain operations.
– **Improved Infrastructure**: Investments in transport and power infrastructure to lower production and logistics costs.
– **Strengthening Local Demand**: Campaigns to encourage the consumption of locally made products and policies to curb imports of goods that compete with domestic manufacturing.

“The current situation is unsustainable. Without intervention, more businesses may be forced to shut down, leading to job losses and further economic hardship,” warned Adewale Fagbemi, a leading member of MAN in Ogun State.

### Government’s Position

The state government has acknowledged the plight of manufacturers and pledged to provide support through:

– Partnerships with financial institutions to offer credit facilities.
– Promoting industrial hubs to improve access to essential services like power and water.
– Advocacy for local patronage to stimulate demand for Nigerian-made goods.

### Conclusion

The ₦350 billion worth of unsold goods in Ogun State underscores the urgent need for coordinated efforts between manufacturers, government, and stakeholders to tackle the root causes of the crisis. A balanced approach that addresses both supply and demand-side challenges will be crucial to revitalizing the sector and safeguarding its role as a key driver of economic growth.