The harsh economic weather occasioned by rising prices, a fall in demand of manufactured goods and exchange rate collapse together with other ancillary factors have all conspired to fuel a 20 percent fall in the production of food and beverages, a development, which has in turn, led to jump in the stock of unsold inventory to 34 percent.
Following the declining demand from consumers as a result of persistent rise in prices reflected in further rise in food inflation rate to 31.52 per cent in October, manufacturers of food and beverages have called out to government to do something to reverse the trend.
The fall in demand has also created spanner in the work for these manufacturers to sell finished goods as their stock value of unsold finished goods rose by 34.03% year-on-year to N78.82 billion in the nine months ending September 30, 2023 (9m ’22).
It’s no brainer that the inflationary trend in Nigeria has continuously been on a constant upward spiral, rising by 5.95 percentage points to 26.72 percent in September 2023 from 20.77 percent a year ago, fuelled in large measure by various intertwining variables including rising energy cost, insecurity, especially in the farming communities in Nigeria, Russia-Ukraine war among others.
Dr. Olufemi Omoyele of the Department of Entrepreneurship, Osun State University told Business Hallmark that “the rise in the stock of unsold inventory not only in food and beverages, but other manufacturing sub sectors can not be divorced from the larger picture of dismal state of the economy, the rise in the pump price of petrol by 127.8 percent this year alone from N257.12 per litre in January 2023 to an average of N560 per litre in September, all these combining to pressure consumer wallets and undermine their purchasing power.
