Business

Manufacturers sell below production cost to offload N2trn unsold inventory

Published

2 days ago

July 16, 2026

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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.

Findings by the Manufacturers Association of Nigeria (MAN) show that while manufacturers have recorded modest improvements in sales volumes, the gains are largely driven by aggressive price cuts and thinner profit margins rather than any meaningful recovery in consumer purchasing power.

Speaking in an interview, Director General of MAN, Segun Ajayi-Kadir, said many manufacturers have been forced to absorb losses simply to move products and keep their factories operating.

“What has happened is that manufacturers have continued to sell more, not because demand has improved, but because they have taken a hit by lowering prices in order to sell more,” he said.

According to him, the sector’s unplanned inventory, estimated at just under N2 trillion, has compelled many firms to dispose of finished goods at prices far below optimal profitability and, in several cases, below production cost.

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.

Ajayi-Kadir said manufacturers are responding by increasing local sourcing of raw materials and investing more in value addition to reduce dependence on imports. However, he noted that high foreign exchange costs and import-duty benchmark pricing continue to undermine the competitiveness of locally manufactured products, limiting Nigeria’s ability to maximise opportunities under the African Continental Free Trade Area (AfCFTA).

He stressed that improved incentives, cheaper financing and more efficient logistics are critical to positioning Nigerian manufacturers to compete effectively across African markets.

According to him, financing remains one of the biggest obstacles to industrial growth. With the monetary policy rate hovering around 26 per cent, commercial bank lending rates have climbed to between 30 and 35 per cent, making borrowing commercially unsustainable for most manufacturers.

“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.

He said the increase has significantly raised debt servicing costs for manufacturers that previously accessed intervention funds at single-digit rates, further tightening already stretched cash flows.

“Manufacturers who had secured credit at around 9% are now being required to pay 15%, a sharp jump that further tightens already stretched balance sheets,” he stated.

To ease the pressure, MAN requested the Federal Government to immediately release the promised N1 trillion Manufacturing Stabilisation Fund, saying the intervention is urgently needed to provide affordable credit to struggling manufacturers.

Business

FG to track poverty, incomes to assess impact of reforms — Oyedele

Published

15 hours ago

July 17, 2026

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By Yinka Kolawole

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has disclosed plans by the Federal Government to publish indicators tracking poverty, incomes and inequality to assess the impact of the government’s economic reforms on the living standards of Nigerians.

He said the move is aimed at addressing criticism of the reform programme suggesting that gains in revenue, foreign exchange liquidity and investor confidence have yet to translate into meaningful relief for households facing high food, transport and living costs.

Speaking at a ‘ conference organised by BusinessDay newspaper, in Lagos, yesterday, Oyedele said the government would assess “shared prosperity” using three measures – reductions in multidimensional poverty, increases in real income per capita, and lower inequality.

The government is seeking to demonstrate that reforms introduced in 2023, including scrapping a fuel subsidy and liberalising the naira, applauded by lenders and investors, are translating into broader gains for Nigerians after driving up inflation and living costs.

Recall that the International Monetary Fund (IMF) said in June that ‘ the reforms were improving investor confidence and economic stability, 63% of the Nigerian populace remained in poverty and millions faced food insecurity.

The measures have also been accompanied by criticism over persistent corruption and allegations of unbudgeted government spending, raising questions about ‘ whether the sacrifices demanded of citizens are being matched by fiscal discipline.

Oyedele said inflation was easing, the foreign exchange market was functioning more efficiently and investor interest was returning, ‘ but acknowledged that macroeconomic stability alone would not be enough.

“A stable economy can still be a stagnant one if we become complacent,” he said.

Oyedele said ‘ the ministry of finance would be responsible for producing the scorecard but did not provide a timeline for publishing the indicators or say how frequently they would be updated.

Business

CBN mandates BDCs to sell unutilised FX to NFEM within 24hrs

Published

15 hours ago

July 17, 2026

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•May confiscate unutilised balance

By Elizabeth Adegbesan

The Central Bank of Nigeria, CBN, has directed Bureau De Changes, BDCs, to sell unutilised foreign exchange (FX) balances to the Nigerian Foreign Exchange, NFEM, market within twenty-four (24) hours of the expiry of the utilisation period.

The apex bank disclosed this in its regulatory guidance on purchase of FX by BDCs through authorized dealer banks in NFEM.

According to the apex bank, “BDCs are not permitted to retain in their possession any foreign exchange purchased from the NFEM that remains unutilised. All unutilised balances shall be sold back to the NFEM market within twenty-four (24) hours of the expiry of the utilisation period.

“Failure to comply shall attract regulatory sanctions including but not limited to forfeiture of the unutilised balance and suspension of the BDC’s NFEM access.

‘‘BDCs shall disclose any unutilised balance from the prior week in each new purchase request submission.

“Authorised Dealer Banks shall factor disclosed unutilised balances into their weekly cap calculations.”

CBN said further that this guidance aims at facilitating seamless implementation of the framework and support sustained liquidity in the retail segment of the foreign exchange market.

The apex bank also prohibited third party transactions saying, “Foreign exchange purchased by a BDC shall be credited only to the BDC’s registered settlement account.

“Disbursement to any account other than the BDC’s own registered account shall constitute a regulatory violation and shall be reported immediately to the CBN.”

CBN noted that only BDCs in possession of a valid and subsisting CBN licence shall be entitled to access foreign exchange under this framework.

The apex bank, however, excluded BDCs under regulatory sanction, whose licences are suspended, or whose operating conditions have been restricted by the CBN, from participation until such restrictions are lifted.

The apex bank also mentioned that it shall maintain a centralised portal, the FX BDC Purchase Tracker (FXBT), to which all BDCs shall be registered and submit real-time or same-day data on BDC purchases, enabling systemic compliance and oversight.

It also warned that no Authorised Dealer Bank should impose exclusivity arrangements, referral fees, or any condition that restricts a BDC’s freedom to select its preferred counterparty bank.

The apex bank warned that violations of the provisions of the Circular and the attached Guidance shall attract appropriate regulatory sanctions.

Business

Outgoing CIIN President attributes successful tenure to flagship initiative

Published

16 hours ago

July 17, 2026

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By Rosemary Iwunze

The outgoing President of the Chartered Insurance Institute of Nigeria, CIIN, Mrs. Yetunde Ilori, has said that her flagship initiative, tagged ‘EPIC’, succeeded in bridging the critical knowledge gap between insurance practitioners and consumers.

Ilori stated that EPIC, which stands for Education, Professionalism, Institutional Recognition and Capacity Building, contributed in driving financial literacy and deeper market penetration.

Ilori disclosed this yesterday, during her valedictory victual press conference held in Lagos, where she reviewed her two-year tenure and highlighted the major milestones recorded under her administration.

She pledged her unwavering commitment to the continuous growth and development of the Nigerian insurance industry even as she prepares to step down from the institute’s leadership.

Reflecting on the progress made during her presidency, Ilori stated that the strategic direction of her administration was fully guided by her E.P.I.C framework, which laid the foundation for the highly successful maiden Insurance Industry Week Celebration, an event designed to celebrate outstanding professional excellence, foster innovation, and enhance public confidence in the sector.

A major highlight of her tenure was the strategic repositioning of the College of Insurance and Financial Management (CIFM), as under her watch, the college has evolved into a dependable hub for human resource development and technical capacity building within the financial services sector.

She also emphasized that the achievements recorded during her presidency were made possible through deliberate and collaborative partnerships with other arms of the insurance industry, notably the National Insurance Commission (NAICOM), the Nigerian Insurers Association (NIA), and various broker associations.

She said: “I feel deeply fulfilled as I hand over the mantle. My commitment to the insurance sector does not end with my presidency, I will continue to serve the industry in every capacity possible to ensure its long-term stability and success.”