Economy
Manufacturers Lament N1.24trn Unsold Finished Products in H1 2024
By Adedapo Adesanya
Local producers are not happy about the current economic situation in Nigeria as it is affecting their businesses, causing them to incur losses.
In the first half of 2024, the inventory of unsold finished products in the manufacturing sector surged by 357.57 per cent year-on-year to N1.24 trillion.
At the unveiling of its first half economic report on Monday in Lagos, the Manufacturers Association of Nigeria (MAN), through its chairman, Mr Francis Meshioye, the group called for the implementation of decisive and coherent economic reforms.
The association listed key areas of focus as enhancing policy consistency, improving the business environment, and fostering economic diversification.
The organisation said the high levels of unsold inventories reflect the challenges faced by consumers and the need for interventions to stimulate demand and improve the sector’s performance, adding that the reforms were needed to address the challenges being faced by manufacturers.
Mr Meshioye noted that the first half of 2024 was marked by significant challenges for Nigeria’s manufacturing sector, including high operational costs, declining consumer demand, and rising inflation, stressing that while some sectors showed resilience and growth, others struggled with declining production values, rising inventories, and reduced employment.
The group noted that the lingering impact of high interest rates, debt sustainability challenges, continuing geopolitical tensions and ever-worsening climate risks continued to pose challenges to growth in the sector, emphasising that this threatened decades of development gains, especially for developing and small island developing states.
The MAN report said in Nigeria’s manufacturing sector, capacity utilisation showed a slight year-on-year decline to 56.4 per cent in H1 2024 from 56.5 per cent in H1 2023.
It was revealed that there was a 2.8 per cent increase compared to H2 2023, reflecting some recovery.
“Real manufacturing output in Nigeria declined by 1.66 per cent year-on-year in H1 2024, falling to N1.34 trillion from N1.36 trillion in H1 2023.
“In spite of this decline, the sector saw a 9.97 per cent increase compared to H2 2023, driven by a baseline effect.
“In nominal terms, the manufacturing sector’s output in Nigeria increased by 30.38 per cent year-on-year, reaching N5.34 trillion in H1 2024.
“This growth was primarily driven by the sharp rise in domestic prices, as reflected in the Consumer Price Index (CPI), which surged to 34.19 per cent in June 2024,” MAN said.
Also, the manufacturing sector’s local raw material sourcing improved slightly to 56.03 per cent in H1 2024, up from 55.4 per cent in H1 2023.
According to the MAN president, the modest increase indicates a gradual shift towards local sourcing, driven by difficulties in obtaining foreign exchange.
He, however, noted that some sectors, such as non-metallic mineral products and textile, apparel & footwear, faced declines in local sourcing, reflecting the challenges of shifting away from imported raw materials.
Despite this, Mr Meshioye stated that investments in the manufacturing sector continued to rise, reaching N250.13 billion in H1 2024, a 29.63 per cent year-on-year increase.
By Modupe Gbadeyanka
Customers of AXA Mansard in the Micro Small and Medium Scale Enterprise (MSME) sector of the economy will enjoy free exhibition stands at the Made by Nigerians Fair.
The fair is scheduled to take place on Saturday, December 7 and Sunday, December 8, 2024, at the Landmark Event Centre, Lagos.
To support small business owners, AXA Mansard is paying for stands for selected entrepreneurs to showcase their products at the fair, which attracts thousands of people.
According to the Head of Marketing at AXA Mansard Insurance Plc, Mr Olusesan Ogunyooye, this is another gesture by the company to show that MSMEs can benefit from having insurance.
He described MSMEs as the backbone of any economy, noting that they drive innovation, create jobs, and contribute significantly to national development.
“Our support for these businesses at the MBN Fair reflects the commitment to their growth and sustainability. We are passionate about helping them reach their full potential by connecting them with resources and opportunities that foster success.
“By the very nature of insurance, its benefits are in the future and they are uncertain. That has been a main source of discouragement, particularly to MSMEs. Businesses are geared to making money.
“So, when thinking about insurance, an average MSME would rather invest the money in the growth of his business first.
“The risks that businesses face are also real. There are various types of risks businesses have to contend with today; from burglary to fire, the health of employees, and so on.
“When these risks manifest, they can significantly impact a business negatively. We understand that to get MSMEs to protect themselves and the millions of jobs they create, we must help them strike a balance between growing their businesses and protecting them.
“So, we have come up with different Initiatives to help them grow their businesses. The opportunity to exhibit their products and services to thousands of visitors to the MBN Fair is another in the series of our initiatives.
“We are convinced that for insurance to grow, we need to help people and businesses see it as a strategic lever to grow their businesses, not a cost that takes away from them. If we get this right, it can’t have a massive impact on our economy because, when MSMEs thrive, the economy will prosper.
“We have experimented with this model, and we are particularly excited about the responses from our customers. It is a call for us to do more, and we are committed to Nigerian MSMEs,” Mr Ogunyooye stated.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.05 per cent gain on Friday, December 6 after the price of Afriland Properties Plc went up by 60 Kobo to settle for the day at N16.60 per share versus Thursday’s closing price of N16.00 per share.
Consequently, the market capitalisation of the bourse increased during the session by N520 billion to settle at N1.056 trillion, the same value it ended a day earlier, as the NASD Unlisted Security Index (NSI) went up by 1.5 points to wrap the session at 3,014.91 points compared with 3,013.41 points recorded in the previous session.
Business Post reports that yesterday, the price of Acorn Petroleum Plc depreciated at the close of business by 15 Kobo to trade at N1.54 per unit compared with the preceding day’s N1.69 per unit.
The volume of securities traded in the session by investors soared by 168.3 per cent on Friday to 199,577 units from 74,381 units, but the value of securities went down by 45.8 per cent to N1.4 million from the N2.7 million recorded a day earlier, and the number of deals grew by 20 per cent to six deals from the five deals executed in the preceding session.
Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units worth N5.3 million.
Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 billion.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited rebounded by 0.10 per cent on Friday as almost all the key sectors closed in green when trading activities ended for the week.
The banking index appreciated by 0.73 per cent, the insurance sector gained 0.55 per cent, the energy counter improved by 0.17 per cent, and the industrial goods space jumped by 0.04 per cent, while the consumer goods sector depreciated by 0.16 per cent.
At the close of business, the All-Share Index (ASI) moved up by 96.64 points to 98,210.75 points from 98,114.11 points and the market capitalisation gained N58 billion to quote at N59.534 trillion compared with Thursday’s closing value of N59.476 trillion.
The bourse finished with 27 price advancers and 21 price decliners, representing a positive market breadth index and bullish sentiment.
Golden Guinea Breweries jumped by 9.98 per cent to N5.40, Japaul improved by 9.30 per cent to N2.35, Sunu Assurances expanded by 9.07 per cent to N5.05, Sovereign Trust Insurance rose by 7.69 per cent to 84 Kobo, and Secure Electronic Technology grew by 7.69 per cent to 70 Kobo.
On the flip side, Eterna lost 4.62 per cent to N22.70, Sterling Holdings depreciated by 4.12 per cent to N4.65, Prestige Assurance fell by 3.85 per cent to 75 Kobo, Consolidated Hallmark shrank by 3.85 per cent to N2.50, and Champion Breweries slumped by 3.50 per cent to N3.86.
Yesterday, investors bought and sold 1.0 billion equities worth N17.5 billion in 7,220 deals, in contrast to the 723.0 million equities valued at N12.8 billion transacted in 8,495 deals a day earlier, indicating a decline in the number of deals by 15.01 per cent and a surge in the trading volume and value by 43.98 per cent and 36.72 per cent, respectively.
On top of the activity chart on Friday was Wema Bank with the sale of 472.5 million stocks valued at N4.1 billion, Fidelity Bank traded 251.5 million shares worth N4.0 billion, FCMB transacted 45.0 million equities for N404.9 million, UBA sold 42.3 million shares valued at N1.4 billion, and Japaul traded 20.7 million stocks worth N46.3 million.
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