…Textiles industry leads with N35bn

By Bimbola Oyesola

The economy continues to count its losses from the ongoing recession as local manufacturers reported a whopping N90 billion in unsold inventories following high rates of inflation and weakened consumer purchasing power in 2016.

According to the Manufacturers Association of Nigeria’s  (MAN) latest review of activities in the real sector, the textile industry suffered the most shock, with over N35 billion worth of unsold manufactured products out of the N90 billion loss in the manufacturing sector in 2016.

Although total inventory of unsold manufactured goods in the sector  for last year dropped marginally by over N4.19 billion or 4.4 percent to N90.35 billion, from about N94.54 billion of 2015, the figure was still considered still very unhealthy for the nation’s business  community.

“Inventory of unsold finished goods in the manufacturing sector fell to N35.42 billion in the review period from N45.92 billion of the corresponding periods of 2015; indicating N10.5 billion or 22.9 per cent decline over the period. It also declined by N19.51 billion or 35.5 per cent when compared with N54.93 billion recorded in the preceding half,” the MAN review noted.

A further break down into sectoral categories, shows that a significant proportion of about 24.5 percent of total inventory of N35.422 billion) was observed in the Textile, Wearing Apparel, Carpet, Leather and Leather Footwear group in the period under review. 

Inventory of unsold finished goods in the sector increased to N7.96 billion from N3.17 billion of the preceding half; indicating N4.79 billion increase over the period. 

The report explained further that inventory of unsold finished goods in the group totaled N11.13 billion  in 2016 as against N0.80 billion  recorded in 2015, indicating N10.33 billion increase over the period.

Meanwhile, in the Inter-zonal analysis, Ikeja zone, which is also where the highest production value was recorded in the period under review however witnessed a very significant proportion of 33.1 per cent) of the inventory of unsold finished goods in the sector.

“The inventory in the zone stood at N11.73 billion in the period under review from N2.19 billion in the corresponding period of 2015, showing a N9.54 billion increase over the period. 

According to MAN, this represented a decline of N11.69 billion when compared with N23.42 billion recorded in the preceding half. 

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MAN’s review maintained that inventory of unsold goods in Ikeja zone totalled N35.15 billion in 2016 as against N2.49 billion recorded in 2015, representing an increase of N32.66 billion over the preceding period.

Commenting on the development, the President of the association, Mr.  Frank Jacobs, attributed the loss to Nigerian economy’s poor performance due to the recession, which has plagued the country since 2016.

“This is the fallout of the economic recession when we are not able to sell what we produced. The purchasing power of the consumers was at its lowest ebb as salary remained unpaid in most state while many jobs were lost,” he said.

He lamented that the problem affected all the industries, particularly the textile  industry because of its peculiarity.

“The textile industry suffers most due to dumping of produced materials from Europe and China. You see those unscrupulous people taking Nigeria’s samples abroad to produce and bring them back into the country as products made in Nigeria which they also sell cheaper. They can do this because they are of lower quality compared to the one made here, what this means is that the locally made fabrics would not be patronised but remained in the store as unsold while the substandard ones are having a field day,” he lamented.

Jacobs, however, assured that manufacturers would have a better story to tell in 2017 compared to 2016 as government seems to have got it right and doing a good work with the Presidential Enabling Business Environment Council (PEBEC).

For his part, the President of the Trade Union Congress (TUC), Bobboi Bala Kaigama, blamed  government’s policy somersaults for the huge loss suffered by local manufacturers from unsold inventory, especially in the textile sector.

He wondered why government would be making policies it cannot implement.

Kaigama expressed worries over the Federal Government’s lip service on patronage of made-in-Nigeria goods.

According to him, the use of foreign materials for uniforms by government agencies such as the military and paramilitaries, ministries, parastatals, schools, would not encourage the local manufacturers, but rather kill them prematurely.

“Government had promised to revive ailing industries such as the textiles, automobile and paper, just to mention a few, but it is not doing so as we speak. But I think it is important now for government to live up to its promises instead of shifting the goal post at will.”