Debt Burden Climbs As 10 Listed Consumer Goods Firms’ Total Borrowings Hit N1.905trn

Aggregate borrowings across 10 listed Fast-Moving Consumer Goods (FMCG) companies rose to N1.905 trillion in 2025, reflecting heightened reliance on debt financing amid elevated input costs, FX volatility, and working capital pressures.

The surge signifies how consumer goods manufacturers are leaning on loans to fund operations, expansion, and inventory builds as pricing power and margins remain squeezed by inflation, Nairametrics reported.

An analysis of audited full year 2025 financial statements of major FMCG companies listed on the Nigerian Exchange showed that Dangote Sugar Refinery Plc, Nestlé Nigeria Plc, and BUA Foods Plc recorded the largest debt positions in the sector.

The review also indicated that debt size alone does not fully determine financial strength, as liquidity levels, shareholder equity, and leverage ratios remain critical in assessing sustainability.

While some companies moved aggressively to cut borrowings and rebuild liquidity, others maintained large debt books to support expansion projects, inventory financing, and working capital requirements.

The three most indebted FMCG companies accounted for the bulk of borrowings among listed operators in 2025, while some peers ended the year in stronger net cash positions.

The figures suggested that large FMCG players continue to rely on debt financing for expansion, inventory management, and working capital requirements.

Beyond the top three, several companies made notable progress in deleveraging during the year, while others maintained relatively modest borrowings.

Dangote Sugar Refinery ranked as the most indebted company with total borrowings of N725.31 billion, up 1.09 per cent from N717.51 billion in 2024. Nestlé Nigeria followed with a debt profile of N476.04 billion in 2025, lower than N653.70 billion in 2024, yet remains structurally overleveraged; while BUA Foods posted borrowings of N469.38 billion, lower by 4.82 per cent from N493.14 billion in the prior year.

Others are PZ Cussons Nigeria (N71.27 billion), Nigerian Breweries (N59.71 billion), Champion Breweries (N59.03 billion), Guinness Nigeria (N43.92 billion), Honeywell Flour Mills (N26.97 billion), Cadbury Nigeria (N22.81billion) and Vitafoam Nigeria (N9.30 billion).

The report showed that Dangote Sugar Refinery remains heavily leveraged, with debt continuing to play a major role in financing operations and expansion. For a large-scale sugar producer, this may be strategic, but it raises sensitivity to interest costs and execution risk.

“This implies that the firm is highly exposed to financing costs, especially in a high-interest rate environment.”

The Company said that “notably, several listed consumer goods firms ended full year 2025 with more cash than debt, placing them in relatively stronger liquidity positions.”

It added that consumer goods companies have faced sustained pressure over the past two years as inflation raised production costs, interest rates increased financing expenses, and currency depreciation inflated the cost of imported raw materials.

“Many firms responded by restructuring debt and reducing exposure to expensive borrowings. Others relied on loans to sustain operations, fund inventory purchases, or finance expansion plans. Companies with stronger cash positions were better able to absorb economic shocks. Weak equity positions made leverage ratios appear more stretched for some operators. This explains why debt levels varied widely across the sector despite similar macroeconomic conditions,” it added.