Macroeconomic Signals
Despite claims by the Federal Government that key macroeconomic indicators improved in 2025, recent financial results from Nigeria’s manufacturing sector show that operators continue to battle severe operational and cost pressures.
Latest industry data reveal a sharp rise in unsold finished goods and raw material stockpiles across major manufacturing companies, underscoring the lingering impact of inflation, foreign exchange volatility and tight credit conditions on industrial performance.
In the first nine months of 2025, leading manufacturing firms recorded a combined inventory increase of about ₦200 billion, with total inventories rising to approximately ₦1.8 trillion, up from ₦1.6 trillion in the same period of 2024 — an increase of 18.8 per cent. Over the same period, raw material inventories climbed by 15.4 per cent to nearly ₦1.5 trillion.
Financial analysts say the trend indicates not only weak demand for finished goods but also deliberate stockpiling of inputs by manufacturers seeking to hedge against inflation, exchange-rate instability and monetary tightening.
Industry observers argue that the continued rise in inventory values contradicts official claims that inflation moderated significantly in 2025, as production costs and replacement values remain elevated.
Inventory levels reveal scale of challenge
A review of inventory positions across 17 major manufacturing companies highlights the magnitude of the strain on the sector.
Dangote Cement Plc recorded the highest inventory position at ₦769.5 billion, up from ₦669.7 billion in the corresponding period of 2024.
Nigerian Breweries Plc saw inventories rise to ₦224 billion from ₦181.3 billion, while Nestlé Nigeria Plc reported ₦203.4 billion, up from ₦174.8 billion.
Lafarge Africa Plc posted ₦117 billion, compared to ₦104.2 billion previously, while BUA Foods Plc recorded ₦76.7 billion, up from ₦59.8 billion. Cadbury Nigeria Plc’s inventory rose to ₦26.7 billion from ₦13.8 billion.
International Breweries Plc reported ₦107 billion, up from ₦89.7 billion, while Guinness Nigeria Plc’s inventories increased to ₦63.7 billion from ₦41.9 billion.
Other firms with notable inventory growth included Northern Nigeria Flour Mills (₦20.8 billion from ₦16.5 billion), Champion Breweries Plc (₦3.7 billion from ₦2.9 billion) and Vitafoam Nigeria Plc (₦28.7 billion from ₦20.5 billion).
However, some manufacturers recorded improved inventory positions. Dangote Sugar Plc reported a slight decline to ₦130.5 billion from ₦131.5 billion, while UAC of Nigeria Plc reduced inventories to ₦37.5 billion from ₦54.9 billion.
NASCON Allied Industries Plc posted ₦14.3 billion, down from ₦17.6 billion, while Unilever Nigeria Plc recorded ₦28.3 billion compared with ₦30.8 billion. Berger Paints also reduced inventory to ₦2.5 billion from ₦3.3 billion.
Raw material stockpiles deepen cost pressures
The surge in finished goods inventories was mirrored by a sharp rise in raw material holdings, reflecting manufacturers’ efforts to guard against foreign exchange risks and imported inflation.
Nigerian Breweries Plc led with raw material stock valued at ₦486.9 billion, up from ₦407.2 billion, followed by Dangote Sugar Plc, which recorded ₦450.7 billion from ₦401.6 billion.
Nestlé Nigeria Plc increased raw material holdings to ₦84 billion from ₦73.5 billion, while Cadbury Nigeria Plc posted ₦10 billion, up from ₦5 billion.
BUA Foods Plc recorded ₦52.5 billion against ₦38.6 billion, while Guinness Nigeria Plc’s raw materials rose sharply to ₦39.6 billion from ₦8.7 billion.
Northern Nigeria Flour Mills posted ₦17.7 billion from ₦14.7 billion, Champion Breweries Plc recorded ₦6.9 billion from ₦4.9 billion, and Vitafoam Nigeria Plc held ₦21.9 billion compared to ₦16.3 billion.
In contrast, Dangote Cement Plc reduced raw material inventories to ₦255.2 billion from ₦299.8 billion, while Unilever Nigeria Plc posted ₦14.4 billion from ₦19.8 billion. NASCON Allied Industries Plc declined to ₦6.6 billion from ₦11.2 billion, Lafarge Africa Plc posted ₦9.7 billion from ₦10 billion, and Berger Paints recorded a marginal drop to ₦4.6 billion from ₦4.7 billion.
Experts explain rising unsold goods
Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, attributed the growing inventory levels to weak consumer purchasing power, rising production costs and shifting consumption patterns.
He explained that sustained inflation over the past three years has significantly eroded household incomes, limiting consumers’ ability to buy manufactured goods, especially non-essential products.
Yusuf noted that escalating energy costs, foreign exchange pressures, logistics challenges and input costs forced manufacturers to raise prices, further suppressing demand.
“As prices rise in response to higher costs, consumers — already under financial strain — reduce consumption. This leads to unsold finished goods and accumulating inventories,” he said.
He added that slow sales also cause raw material stocks to remain high, as production cycles are adjusted downward in response to weak demand.
Industrial growth under pressure
Yusuf warned that the trend poses serious risks to Nigeria’s industrialisation drive, noting that industrial sector growth remained sluggish in 2025.
According to him, industrial GDP growth in the last quarter of 2025 stood at about 1.25 per cent, compared to overall GDP growth of 4.3 per cent, reflecting low capacity utilisation, job risks, declining investor confidence and weaker profitability.
He called for expanded resource-based industrialisation, improved local sourcing of inputs, cost restructuring, product innovation and targeted market strategies to support manufacturers.
Financing, FX risks persist
Former President of the Chartered Institute of Stockbrokers, Oluropo Dada, said rising inventories reflect a combination of high production costs, weak demand and continued reliance on imported inputs.
He warned that the situation increases working capital pressure, financing costs and the risk of capacity underutilisation, with possible job losses.
Similarly, Executive Vice Chairman of Highcap Securities Limited, David Adonri, said the surge in inventory values reflects inflationary pressures rather than increased output, contradicting claims of significant inflation moderation in 2025.
Financial analyst Ambrose Omordion added that high interest rates worsened the burden, as unsold goods financed through bank loans attracted interest expenses, turning inventories into financial liabilities.
He also questioned the effectiveness of Nigeria’s backward-integration policy, noting that uneven progress continues to expose manufacturers to currency volatility, inflation and weak consumer demand.
Manufacturers Face Mounting Pressures as Unsold Goods, Raw Material Stocks Surge Despite Improved
