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Manufacturers Face Dire Situation As Unsold Goods Soar To N470 Billion

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The Nigerian manufacturing sector is facing difficulties as the amount of unsold goods continues to increase.

 

The inventory stockpile has risen by 22 percent, reaching N469.66 billion in 2022 compared to N384.58 billion in the previous year. Moreover, industry operators express concerns that the situation is deteriorating further.

 

According to the bi-annual economic review conducted by the Manufacturers Association of Nigeria (MAN), the umbrella body of manufacturers in the country, the increase in inventory can be attributed to the drop in the purchasing power of Nigerians, resulting from sustained inflationary pressures.

 

Additionally, the cash crunch that affected the economy in the first quarter of 2023, following the implementation of the Naira Redesign policy, has further worsened the situation.

 

Despite these challenges, the report reveals that the manufacturing sector has experienced a decline in factory output. In 2022, the sector’s factory output decreased by 9.7 percent, amounting to N6.67 trillion, compared to N7.39 trillion in 2021.

 

Commenting on the development, Director General, MAN, Segun Ajayi-Kadir, stated: “Inventory of unsold goods in the sector totalled N469.66 billion in 2022 as against N384.58 billion recorded in 2021.

 

The high inventory recorded in the period is attributed to low purchasing power in the economy due to the declining real income of households following the continuous increase in inflationary pressures in the country.

 

“This is worsened by the Naira Redesign policy which began in the last quarter of 2022. The withdrawal of a large amount of the ‘old Naira’ without commensurate replacement with the ‘new notes’ resulted in a cash crunch in the economy with very limited means of purchasing items by households across the country.

 

“Inventory of unsold finished products in the manufacturing sector increased to N282.56 billion in the second half of 2022 up from N169.75 billion recorded in the corresponding half of 2021; thus, indicating N112.81 billion or 66 percent increase over the period. It also increased by N85.46 billion or 51 percent when compared with N187.1 billion recorded in the first half of the year.

 

“In the second half of 2022 as the cost of wheat and other food inputs increased; prices of fuels, particularly diesel rose by over 50 percent; cost of transportation logistics including shipping escalated even as the effect of COVID-19 pandemic is yet to fully die down. In addition to these challenges was the CBN policy on Redesigning the Naira.

 

“The CBN policy created a cash crunch that debilitated economic activities in the last quarter of 2022. This particularly affected the manufacturing sector adversely as it was extremely difficult to sell most of the Fast-Moving consumer Goods (FMCG) and other commodities by the sector in the period.” He called on the government to formulate and implement a national policy that would address the current high inflation in the country.

 

Also speaking on the situation, MAN President, Francis Meshioye said: “The manufacturing sector has been struggling with crashing sales, mainly attributable to the sustained naira scarcity. A continuing decline in sale volumes will necessitate production cuts and a reevaluation of investments in the sector.

 

“Specifically, if sales proceeds can no longer sustain business overheads and operating expenses, businesses will be forced to scale down their operations which would result in factory closures, job losses, a decline in exports and much more.”

 

Operators within the Fast Moving Consumer Goods (FMCG) industry are calling upon national and sub-national governments in Nigeria to reconsider their approach to revenue mobilization. They argue that targeting the FMCG sub-sector has resulted in a sluggish pace of growth within the industry.

 

Director, Corporate Affairs & Sustainability, Coca Cola Hellenic Bottling Company, Mr. Ekuma Eze, who made the plea at a recent event, said the FMCG sector has borne the brunt of such revenue mobilisation drives.

 

According to him, the FMCGs, which form the largest chunk of the manufacturing sector in Nigeria, and the fourth largest sector of the nation’s economy sector, are overburdened with taxes and levies, compared with their counterparts in other countries.

 

Eze said the introduction of, and increase in taxes, in recent times, bore eloquent testimony that companies in the nation’s FMCG remain the target of the government’s revenue drive.

 

Company income tax rate in Nigeria is 30 percent for companies with gross turnover greater than N100 million, compared to an Africa average of 23.5% and a worldwide average of 23.4 percent.

 

He stated further: “Tertiary Education Tax is now 3 percent going by the Finance Bill 2022.

“There’s been a consistent increase in excise tax for beer and tobacco companies while N10/1 excise tax was introduced in June 2022.

“The introduction of this new tax regime, due to price elasticity of demand, which is high among lower income consumers, who are major consumers of the products, has led to reduction in sales and a revenue decline of 16 percent between June 1 and December 2022.”

 

He also lamented the negative impact of the recent Naira Redesign Policy on the sector, noting that the policy had succeeded in significantly reducing sales between February and March, this year, by between 20 percent and 60 percent.

 

According to him, the fallout of this is the re-organisation option being contemplated by some companies; a development, he noted, may further compound the nation’s unemployment issue.

 

“Many FMCGs reported significant sales decreases in February and March by between 20 to 60%. Many of these businesses are planning to restructure, which will worsen the unemployment problem,” Eze added.

 

Recall that MAN had issued a statement on May 2, 2023 condemning the recently released 2023 Fiscal Policy Measures, FPM, by the Federal Ministry of Finance, Budget and National Planning, saying that it would lead to industry recession, capacity under-utilisation, and layoffs of workers.

 

Also commenting, Dr Chinyere Almona, Director General, Lagos Chamber of Commerce and Industry (LCCI), lamented that the rising inflationary pressure has significant and worrisome impacts on both the household and business sectors.

 

Her words: “Since February 2016 to date, the country has recorded a double-digit monthly inflation rate, with an adverse effect on the size of its middle class.

 

“Apart from eroding purchasing power, it has led to inventory stockpiles. If left unchecked, the high inflation may further constrain production, lead to a steeper rise in poverty figures, frustrate economic growth, and lead to higher unemployment and non-competitive exports, especially in the sub-region. LCCI is concerned that despite consistent monetary policy rate hikes, taming the inflation trend has remained futile.

 

We, however, appeal to the government to implement fiscal measures, such as reducing/ removing taxes on staple food items to protect the most vulnerable as well as spur demand-side growth.”

 

 

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Gas Infrastructure Fund Sets Terms for Indigenous Access to Funding

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Gas development, a major carbon reduction move - Seplat Energy

Midstream and Downstream Gas Infrastructure Fund (MDGIF) has said that indigenous companies seeking to partner with it and access its equity must show secured gas supply and a confirmed buyer, because no gas project is bankable without both.

The Fund was established under the Petroleum Industry Act (PIA), and designed as the “master key” for unlocking gas processing, infrastructure and bankability.

Deputy Director at MDGIF in the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), Engr Elvis Duruji made this known at the OTL Africa Downstream Energy Week in Lagos. He spoke at a session on: “Scaling Energy Options: Unlocking Gas and Renewables through Processing and Infrastructure.”

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Expatiating further, Duruji said the two conditions decide whether the fund takes an equity stake in a project, since they determine its returns and viability, insisting that the security of the gas feedstock is very important. He further noted that project operators must locate their sites at a gas processing plant or close to a CNG mother station.

The Fund, he added, has used N671 billion to catalyse N1.6 trillion from private Nigerians.

“The Fund has partnered on 31 projects covering 205 infrastructure assets at different stages of execution. Of these, 127 are at different levels of project management, and 10 have been commissioned.

Duruji cited Topline Limited’s mini-LNG plant in Delta State as a success story. “For three years, a Nigerian company, Topline, was looking for a credit facility from InfraCredit, and no one was able to loan them money because they are Nigerian,” he said. “They came to the fund and we partnered with them.”

He said Topline is now the first indigenous mini-LNG operator in Nigeria, with commissioning due before December.

He also cited a programme to convert 20 university campuses to CNG through daughter stations.

“Three CNG stations are operational and 14 more are to be commissioned before December. Duruji added that the fund is working with fuel-station partners, including Ibile Oil and Gas Corporation, which is delivering 15 CNG stations across Lagos.

“These are our success stories,” he said.

He said, for CNG projects, proximity to the gas processing plant “is very important. You must have security of gas supply. We also ensure that you have a gas supply agreement with producers. What is the volume and price that the producer is willing to give to our would-be equity partner? This always affects their credit returns and internal rate of return. This is what will determine the project viability, and this is key,” he said.

Duruji also noted that offtake is equally critical adding that. “We need to know the offtakers and the regasification facility. The same thing for CNG, you need to get a compressor,” he said.

According to him, the MDGIF intervenes in gas projects where commercial lenders will not, because “most Nigerian companies are in trading and operating marginally at the downstream level because the sector is highly capital intensive,” adding that no Nigerian bank would give single-digit loans for exploration and production.

“Nigerian Banks lends at as much as 30 per cent interest, whereas, foreign firms coming into Nigeria to explore, by contrast, have access to cheap loans in single digits from their home country financial institutions,” he said.

The MDGIF, he further explained, intervenes “by pricing the risk, coming up with mitigation and catalytic equity, which we now use to bring that barrier to a level to allow Nigerians who are interested to come into the midstream to partner through the equity finance that we will provide without interest.”

“We bring in the catalytic equity, which is about 49 percent, because we want to allow you to be the operator. We will stay with the private investor and walk them through all that,” he added.

He said MDGIF brings “minority equity, due diligence and risk governance” and uses these as catalytic capital “to make the projects bankable, to make them balanced capital structure that will attract private confidence.”

He identified processing plants, transport, storage and last-mile distribution as the main gaps. Non-associated gas, he said, is “very expertise and capital intensive,” and pipeline networks are needed to move gas from the reserve to the last mile.

“The more gas infrastructure we roll out, the more we are helping the energy system where renewables cannot,” he said.

Duruji identified three mandates of the MDGIF: to increase domestic gas consumption, to aggregate flared gas and bring it into the domestic market, and to mobilise private investors who lack the funds to play in the midstream.

“The MDGIF has three mandates: increase domestic gas consumption, aggregate flared gas and bring it into the domestic market, that is key,” he said. “The other mandate is to mobilise private investors that do not have the funds to be able to play in the midstream, bring their funds.”

He added: “We also have the mandate to reduce gas flare in Nigeria exploration and production sites.”

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UN Engages NCDMB to Deepen Female Access to $40m Oil, Gas Fund

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NCDMB Emerges Best MDA In Ease Of Doing Business Ranking

Easing access to the dedicated $40 million Women in Oil and Gas Fund is the focus of ongoing strategic conversation between the United Nations Entity for Gender Equality and the Empowerment of Women (UN Women), and the Nigerian Content Development and Monitoring Board (NCDMB).

Biztellers reports that the two bodies are keen to collaborate to ensure that more women-owned businesses and professionals benefit from industry’s opportunities and consequently play a stronger role across the sector’s value chain.

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Recall that in April 2021, the NCDMB established a $20 million fund dedicated to supporting women-owned and women-led businesses in the oil and gas sector, which the Nigerian Export-Import Bank (NEXIM) complemented by matching the fund with an additional $20 million.

However, despite this significant commitment and favorable loan terms, the uptake of the scheme has remained below expectations to date.

The discussions were advanced last week when the UN Women’s Country Representative to Nigeria and the Economic Community of West African States (ECOWAS), Ms. Beatrice Eyong, led a delegation to the NCDMB’s Abuja liaison office.

The team was received by the Board’s General Manager of Corporate Communications, Dr. Obinna Ezeobi, on behalf of the Executive Secretary, Engr. Felix Omatsola Ogbe.

The meeting explored proposed capacity-building initiatives for NCDMB personnel, aimed at mainstreaming gender perspectives into the Board’s project planning, budgeting, and execution frameworks.

Other key areas of discussion included vendor development schemes to better position women-led oil and gas businesses for industry opportunities, strategies to raise awareness of available financing options, and potential affirmative procurement measures designed to expand the participation of women-owned companies across the oil and gas value chain.

The UN official commended NCDMB for its ongoing gender inclusion efforts, noting that the Board is already implementing several measures consistent with its mandate.

She proposed conducting a study to identify the reasons women face challenges in accessing the financing facility, including potential barriers related to documentation, business registration, tax compliance, and limited awareness.

She further highlighted key initiatives currently being undertaken by the UN Office, such as programmes on women’s economic empowerment, leadership development, and the elimination of gender-based violence, among others.

Ezeobi welcomed the proposals and affirmed the Board’s readiness to partner with UN Women. He highlighted several innovative initiatives already implemented by the Board to create opportunities for women to participate, grow, and lead in Nigeria’s oil and gas industry.

These include the establishment of a dedicated funding scheme with NEXIM Bank that enables women-owned or women-led firms to access financing at a highly competitive 5 per cent interest rate, as well as the creation of a Diversity Sectoral Working Group within the Nigerian Content Consultative Forum (NCCF), designed to mainstream women’s issues into local content policy and decision-making processes.

The Board also supports associations of women who work across the Energy Industry value chain, where they network, build confidence and links to progress their careers or businesses.

Ezeobi noted that NCDMB has also invested significantly in capacity-building programs for women entrepreneurs and business leaders, covering critical areas such as business sustainability, corporate governance, and strategic management.

The Board has further supported women’s participation in technical occupations while encouraging young girls to pursue careers in science, technology, engineering, and mathematics (STEM).

He acknowledged that women remain underrepresented in the oil and gas industry, citing limited access to technical education, finance, and commercial opportunities, as well as entrenched perceptions of the sector as predominantly male.

Ezeobi reiterated NCDMB’s willingness to collaborate with UN Women to address these challenges and recommended strategies to accelerate the Board’s support for UN Women’s programmes, thereby advancing gender inclusion across the industry.

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Afreximbank Charts Côte d’Ivoire’s Rise as a Regional Growth Leader in WA

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The African Export-Import Bank (Afreximbank) has released its Côte d’Ivoire Country Brief, providing an in-depth examination of the West African nation’s macroeconomic outlook, regional and international trade dynamics, financial sector development and debt sustainability profile.

The brief highlights Côte d’Ivoire as one of Africa’s fastest-growing economies. Home to 33.5 million people and with a nominal GDP forecast at USD116.9 billion in 2027, the country has sustained average real GDP growth of around 6.5% per year between 2021 and 2024, accelerating to an estimated 6.6% in 2025. Growth is forecast to moderate to 5.8% in 2026 before rebounding to 6.2% in 2027, supported by rising crude production, continued infrastructure investment and resilient domestic demand.

The brief also points to a notably improved near-term macroeconomic environment. Inflation fell sharply to just 0.1% in 2025, supported by easing commodity price pressures and government measures to stabilise fuel and food prices, with the CFA franc’s euro peg providing a durable exchange rate anchor. The fiscal deficit narrowed to 3% of GDP in 2025, meeting the West African Economic and Monetary Union (UEMOA) ceiling, backed by stronger revenue collection and ongoing reforms to tax administration and VAT digitalisation.

On trade, this edition charts a significant expansion. Total trade surged from USD26 billion in 2018 to USD57 billion in 2025, anchored by Côte d’Ivoire’s status as the world’s largest cocoa producer, commanding around 40% of global supply, alongside growing exports of cashew nuts, rubber, gold and hydrocarbons.

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The February 2026 Calao South gas condensate discovery and rising output from the Baleine field signaled a broadening export base over the medium term. Strategically positioned on the Gulf of Guinea, with the ports of Abidjan and San Pedro acting as principal gateways into Francophone West Africa, Côte d’Ivoire is deeply embedded in regional trade networks, with African markets accounting for around 22% of its goods trade in 2025.

The brief further notes Côte d’Ivoire’s financial sector strength. The country holds the largest banking sector in UEMOA, accounting for more than a third of regional banking assets. Regulatory reforms, including the adoption of Basel II and Basel III standards, have strengthened supervision and resilience, while the launch of the Central Bank of West African States’ (BCEAO) interoperable instant payment platform in September 2025 is broadening access to digital financial services across the economy.

As this edition notes, Côte d’Ivoire “has moved from a period of rapid debt accumulation and elevated debt service pressure towards a more stable debt profile, supported by fiscal consolidation, active debt management and continued multilateral engagement.” This is a trajectory that positions the country to fully capitalise on the ambitious targets of its 2026-2030 National Development Plan.

Afreximbank’s Group Chief Economist & Managing Director Research commented: “Côte d’Ivoire is consolidating its position as a leading West African growth and trade hub. Its expanding energy sector, world-class agricultural base, regional port infrastructure and increasingly sophisticated financial system offer a strong foundation to attract investment, scale value addition and deepen trade links across Africa.”

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