Manufacturers regaining confidence as forex stabilises – MAN

Manufacturers are optimistic about the stability of the sector following a challenging period of unsold inventory and economic uncertainty, according to the Chairman of the Manufacturers Association of Nigeria, Ogun State Chapter, George Onafowokan.

The PUNCH reported in 2024 that the MAN Ogun State chairman lamented the unsold inventory of members rising to N350bn due to soaring costs, forex scarcity, and infrastructural decay that has hobbled productivity.

Onafowokan, in an interview with The PUNCH, noted that the situation has improved in the mid-first quarter of 2025 as new manufacturing companies are opening up, as old ones find their balance.

“The 2023-2024 figures were very bad,” he said. “Exchange rate losses were very high. There was almost no manufacturer that was not declaring losses between 2023 and 2024. It was a bad year for everybody, which also created a situation of unsold stocks.

“Going into 2025, everybody has had to take the hit on their losses and either move forward or, unfortunately, we had some who closed shop, which was not good for our country, but whoever is left has managed to lick their wounds.”

Onafowokan hailed manufacturers’ ability to stay resilient in 2024, emphasising that the manufacturing sector is unique because it cannot shut down and restart like trading businesses.

He explained: “The manufacturing sector is the only sector that licks its wounds in any bad situation because we cannot go anywhere. We cannot sell off our machines because we’re not happy.

“We’re not traders who typically have a warehouse and a small team. If anything goes wrong, shut the warehouse or sell the building. Manufacturers are the worst hit because you have trained people for so many years and in a bad situation cannot still let them go.”

Onafowokan noted that stock levels of unsold goods have significantly reduced as the market has become more stable, noting “We have moved away from the one and a half years of a bad situation into a more stable situation as the same market started moving upwards.

“From the manufacturer’s perspective, yes, there is a little bit of positive optimism because there is stability and that has meant better decisions in the long term have started coming into play. New factories are coming in.”

The MAN Ogun State chairman attributed part of the recovery to increased availability of foreign exchange and transparency in the forex market.

“Previously, even at N440 per dollar, FX was inaccessible. Now, if the rate is N1,537, you can get it within a reasonable margin,” he remarked. “Since the Central Bank of Nigeria introduced the Electronic Foreign Exchange Matching System in December 2024, market transparency has improved, reducing speculation.”

The improved FX market has allowed manufacturers to better plan and price their products. “We can now predict costs within a small margin, which is crucial for stability. Manufacturers are taking positions and running businesses better than a year ago,” Onafowokan added.

Despite the positive outlook, Onafowokan urged the CBN to sustain its role in stabilising the forex market and ensuring interest rates continue to decline. “It is essential to solidify these gains so that manufacturers can take long-term positions, expand operations, and create more opportunities in the sector,” he maintained.