(Bloomberg) -- Nigerian manufacturers say their inventory of unsold goods jumped to a record high with a value of 402.4 billion naira ($1 billion) as consumer spending fell in a difficult business environment.
It's a confirmation of “the reality that the disposable income of the consumers has been grossly eroded,” Mansur Ahmed, president of the Manufacturers Association of Nigeria, told reporters in the commercial hub of Lagos.
Nigeria's economy contracted 6.1% in the second quarter as the combined impact of the prolonged lockdown to curb the spread of the coronavirus and the plunge in the price of oil, the country's main export, took its toll.
Ahmed said many manufacturing companies are having difficulty in getting foreign currency to import raw materials and spares that aren't available in Nigeria. Over 40% of dollar needs are unmet, constraining producers from operating at full capacity. Unreliable electricity supply is also forcing members to spend more than 38% of their production costs on alternative power, adding to their woes, he said.
The manufacturers' association said President Muhammadu Buhari's government decision to shut the country's borders, ostensibly to curb the flow of illegal goods, was stifling exports by members to the West African regional market.
“It is important that we open it immediately so that important Nigerian manufacturers who are trading in the West Africa region legitimately can resume,” said Ahmed. “Otherwise some of them will lose their significant market.”
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