Nigeria’s most valued non-financial companies with market capitalisation exceeding N1 trillion are experiencing a rise in debt burdens, with their combined debt portfolio increasing by 30 percent in the first quarter of 2025.
According to a BusinessDay analysis, the collective debt of 12 of Nigeria’s most valuable listed firms rose to N6.2 trillion in Q1 2025, up from N4.8 trillion in the same period last year.
This surge is attributed to soaring inflation and the depreciation of the naira, which have pushed many companies to borrow more to offset rising operational costs.
The elite group of companies includes BUA Foods, Dangote Cement, MTN Nigeria, Seplat Energy, Geregu Power, BUA Cement, Transcorp Power, Nigerian Breweries, International Breweries, Lafarge Africa, Transcorp Hotels, and Nestle Nigeria.
As of the close of trading on Thursday, June 5, 2025, these companies have a combined market capitalisation of N40.8 trillion.
This rising debt trend reflects broader macroeconomic challenges. The Central Bank of Nigeria (CBN) has maintained high interest rates, with the Monetary Policy Rate (MPR) held steady at 27.5 percent for a second consecutive meeting.
Since the naira was allowed to float in 2023, the currency has depreciated by over 60 percent, trading at over N1,500/$ in May 2025, compared to around N600/$ in early 2023, creating considerable exchange rate volatility.
“The trend clearly shows that the surge in loan values began with the currency devaluation, not necessarily due to increased borrowing appetite,” said Nabila Mohammed, a banking analyst at Chapel Hill Denham.
Mohammed said that many of these loans were initially dollar-denominated. As the naira depreciates, converting these loans into local currency significantly inflates their naira value, giving the impression of dramatic debt growth.
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Abimbola Adewale, a Lagos-based financial analyst, warned that firms with significant exposure to foreign currency-denominated loans are facing heightened repayment risks due to the weakened naira, which raises debt servicing costs.
According to the CBN’s May Business Expectations Survey. Nigerian firms expect a rise in the value of the naira and an increase in interest rates over the next six months.
The report reveals that 23.9 percent of respondents expect the naira to appreciate against the US dollar within the next six months, giving relief to businesses that have endured the steep devaluation of the currency after the unification of the exchange rate in 2023.
“Only 23.9 percent of respondents expect the Naira to US dollar exchange rate to appreciate in the next six months, down from the 26.3 percent reported last month, and 8.2 percent expect the rise over the next month,” the survey showed.
The naira on Wednesday, June 4, climbed to a two-month high of N1,565.46 per dollar at the official foreign exchange (FX) market, maintaining a trajectory of relative stability that has persisted in recent months.
The last time the local currency traded near this level was on April 4, 2024, when the dollar exchanged at N1,567.02 in the Nigerian Foreign Exchange Market (NFEM), according to data published by the CBN.
The report has shown that the firms expect borrowing costs to fall in the next six months, alongside the exchange rate, thereby reducing pressure for business owners.
Firm analysis:
Dangote Cement
Dangote Cement has seen its debt profile climb by 91.5 percent to N2.26 trillion in just three months. This surge in borrowing led to the highest interest expense among the surveyed companies, reaching N110 billion.
The company generated robust earnings per share (EPS) of N12.9, with a profit after tax standing at N209 billion. The debt-to-equity ratio soared to 55.6 percent, while the net profit margin rose by 20.9 percent from 13.8 percent.
MTN Nigeria
MTN Nigeria saw its debt rise by 23.7 percent to N1.14 trillion. The company’s interest expenses fell to N44 billion from N48 billion on a stable naira.
Additionally, MTN Nigeria faced a decline in its foreign exchange loss amounting to N5.52 billion, from N656 billion, thereby reporting an after-tax profit of N133 billion, its first since 2023
Seplat Energy
Seplat Energy also saw a substantial increase in its debt profile, which grew by 49.7 percent to N1.08 trillion. This led to a 11 percent surge in interest expenses.
Seplat, in its audited results for the three months (Q1) ended March 31, 2025, recorded revenue of N1.228 trillion for the period, up from N268.6 billion reported in the same quarter last year. Its gross profit soared to N535.4 billion from N63.8 billion year-on-year (YoY).
The energy company delivered robust production and cost performance during 1Q 2025, at a new scale, and is firmly on track to deliver FY 2025 guidance. Strong cash position supports early repayment of $250 million, reducing the Revolving Credit Facility (RCF) to $100 million, and an increase in our quarterly dividend to US 4.6 cents per share.
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Nestle Nigeria
Nestle Nigeria saw its debt profile rise to N604 billion; however, as the naira became stable, the company’s interest expense fell by 14 percent.
The company posted a strong recovery in the first quarter of 2025, returning to profitability with a profit after tax of N30.2 billion, a significant reversal from a loss of N142.7 billion in the same period last year.
The result reflects a solid rebound driven by strong revenue growth, improved operating margins, and reduced finance costs. Revenue jumped by 61 percent to N294.9 billion, up from N183.5 billion in Q1 2024, driven by strong demand across its product categories, including Maggi, Milo, Golden Morn, and Nescafé.
BUA Cement
BUA Cement’s debt profile increased by 19 percent to N494 billion, pushing its debt-to-equity ratio to 105 percent.
The cement giant, one of Nigeria’s leading manufacturers, announced a 351.4 percent year-on-year increase in profit after tax, driven by improved production efficiency, cost management, and stronger local demand.
Revenue also rose by 80.5 percent, supported by infrastructure expansion and government-backed construction projects.
