Manufacturers lament Nigerians’ reduced purchasing power, says N4.54tn invested in 2025, N2.12tn worth of finished goods stuck in warehouses
Nigerian manufacturers invested a record N4.54tn in the economy in 2025, while finished products valued at N2.12tn remained unsold as consumers struggled with reduced purchasing power, according to exclusive data obtained from the Manufacturers Association of Nigeria.
The investment figure was 59 per cent higher than the N2.85tn recorded in 2024, indicating a major increase in manufacturers’ capital spending despite challenging business conditions.
According to MAN’s data, investment in plants and machinery accounted for more than half of the total nominal investment, reaching N2.47tn during the year.
The food, beverage and tobacco sector recorded the highest investment at N1.30tn, followed by the non-metallic mineral products sector with N960.44bn. However, the significant increase in headline investment was partly influenced by inflation, which raised the naira value of capital expenditure.
When adjusted for inflation, manufacturers’ investment stood at N1.33tn in 2025, considerably lower than the N4.54tn nominal figure.
Real investment in plants and machinery rose by only 3.1 per cent to N349.17bn. This suggests that the substantial increase in nominal investment did not result in a similar expansion in the actual volume of productive assets acquired.
Nominal investment represents expenditure measured at prevailing prices, whereas real investment removes the effects of inflation and gives a clearer picture of changes in actual economic activity and purchasing power.
The figures also point to considerable inventory pressure within Nigeria’s manufacturing industry in 2025, as the value of unsold finished products climbed to about N2.12tn.
Economists say the accumulation of unsold products indicates that increased production capacity is not necessarily translating into stronger sales.
“The inventory buildup suggests that manufacturers are producing goods that consumers are increasingly unable to absorb at prevailing prices,” said an Abuja-based economist and consultant, Nonso Iheoma.
“For businesses, this means more capital can become tied up in finished goods instead of being converted into cash and reinvested in production.
“It also creates pressure on manufacturers’ working capital. As finished goods remain in warehouses for longer periods, firms may have to rely more heavily on bank credit or other short-term financing to fund operations, while carrying additional storage and inventory costs.”
The situation presents a contrast: manufacturers continued to invest heavily in machinery, plants and production capacity, while weak consumer demand limited their ability to sell products and recover those investments at prices sufficient to cover rising production expenses.
The figures therefore suggest that manufacturers are facing a challenge beyond their capacity to invest and produce. They must also contend with whether domestic and international markets have sufficient demand to absorb their output.
MAN’s Director-General, Segun Ajayi-Kadir, said that although the 2025 figure represented a marginal 1.18 per cent decline from the 2024 full-year figure of N2.14tn, changes across sectors pointed to an ongoing deterioration in consumer purchasing power.
“The Food, Beverage & Tobacco Sectoral Group remained the most heavily impacted, accounting for over 35 per cent of the total inventory at N755.8bn. The high inventory levels for the full year 2025 are occasioned by the squeeze on the Nigerian middle class.”
Nigerians faced elevated inflation in 2025, which reduced the purchasing power of households. Data based on the rebased Consumer Price Index series from the National Bureau of Statistics put Nigeria’s average headline inflation rate at 23.33 per cent for the year.
The high cost of living made many goods increasingly expensive, leaving some households struggling to afford food and other essential items. The SBM Jollof Index, for instance, estimated that the national average cost of preparing a standard pot of jollof rice for a family of five was about N25,486 in October 2025.
The Chief Executive Officer of the Centre for Promotion of Private Enterprise, Dr Muda Yusuf, said industrialisation was more than an economic ambition, describing it as the basis for economic sovereignty, sustainable prosperity and competitiveness in the 21st century.
He said, “The future of economic prosperity lies not in what Nigeria imports, but in what Nigeria produces. Manufacturing remains the bridge between natural resource wealth and broad-based prosperity. Until that bridge is strengthened, the promise of economic transformation will remain only partially fulfilled.”
To stimulate further investment in manufacturing, MAN proposed several measures to the Federal Government.
The association called for a 30 per cent Green Investment tax credit for manufacturers that move to off-grid renewable energy or hybrid captive power systems, including Solar/LNG solutions.
It also recommended that the Nigerian Electricity Regulatory Commission give industrial clusters priority under the Eligible Customer framework, enabling them to purchase electricity directly from generating companies through dedicated feeders.
“There is a need to expand the Bank of Industry (BoI) intervention fund to allow manufacturers to refinance high-interest commercial bank loans at a fixed 7–9 per cent rate for a minimum of 10 years.
“Pass the Nigeria Industrial Policy as an Act of Parliament to make targets and incentives legally binding, preventing arbitrary changes or abandonment by future administrations, it noted, while encouraging measures that would raise the incomes of consumers and make finished goods affordable to Nigerians.
