Top Nigerian companies listed publicly are in a tight spot. They’re paying way more in interest, but they’ve cut down on their debts. This is because of ongoing inflation, pricey loans, and the central bank’s policies that have really made paying off debts a big problem for companies.
Nigeria’s central bank is serious about fighting inflation, which is super high right now. Because of this, they’ve pushed the main interest rate up to 27.5% as of July 2025. We haven’t seen rates this high in years. This makes borrowing naira really expensive, and the central bank says it’s going to keep things tight until prices calm down.
This has really hit companies hard. If you look at ten big companies in areas like cement, oil, gas, and consumer products, their interest costs jumped about 31% in the first part of 2025. That’s from N411 billion to N538.5 billion. At the same time, their total borrowing went down by almost 10% to N6.49 trillion. So, they’re paying more to service smaller debts. The companies with the biggest debts are feeling it the most.
For example, BUA Cement’s finance costs shot up by 250%, even though they slightly reduced their debt. Seplat Energy’s expenses more than doubled even after cutting their borrowing by 20%. Dangote Cement, which has the biggest debt at N2.4 trillion, saw its interest charges go up by 65%.
The News Chronicle learned that some companies have handled things well. BUA Foods cut its interest costs by almost half by paying back loans strategically. Nestlé and Nigerian Breweries also saw their costs drop thanks to better cash flow.
You can really see the stress in the interest coverage ratios, which show how easily companies can pay their interest bills. The average for those ten companies is still okay, above three times, but some are getting close to that danger zone. Dangote Sugar can barely cover half its annual interest, while Cadbury has bounced back, improving its ratio from 1.77x to 7.63x because of stronger earnings.
Even with these tough borrowing conditions, some companies are still making good money and profits. MTN Nigeria, Dangote Cement, and Seplat Energy have all reported solid gains, proving that managing money well and being efficient are still key to surviving.
Since it doesn’t look like interest rates will drop anytime soon, Nigerian businesses have to get used to things as they are. The ones that are careful with debt, protect their profits, and produce strong cash flow will be in the best shape to handle this high-rate situation.
