Nigerian manufacturers are experiencing a pileup of inventory of finished goods due to low purchasing power of Nigerians, the Purchasing Managers Index (PMI) of the Central Bank of Nigeria (CBN) has shown.
A Monetary Policy Committee (MPC) member, Folashodun Shonubi, while citing the report in a statement on Thursday said PMIs for the manufacturing and non-manufacturing sectors contracted in May.
This, according to him, is in spite of the the growth recorded by the manufacturing sector in the first quarter of the year.
“Manufacturing and non-manufacturing PMIs contracted in May 2021, despite growth of the manufacturing sector in Q1:2021, points to the possibility of the buildup in the inventory of finished goods, as a result of low purchasing power,” Shonubi, who is the deputy governor, operations directorate at CBN, said.
Shonubi called for a widening of the scope and coverage of the development finance interventions, especially those targeted at household and small businesses in order to address low aggregate demand and encourage productivity.
He said, “The increasing need to refocus the economy and look beyond oil stares us in the face, as many jurisdictions scale down further investments involving use of fossil fuel.
“Interestingly, the speed and source of our recovery underscored the fact that recent economic downturn was strictly on account of external shock and not due to a weakness in domestic macroeconomic fundamentals.”