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Total borrowings for eight FMCG companies quoted on the Nigerian Exchange (NGX) in 2025 declined by 28% to N1.20 trillion, from the N1.66 trillion recorded in 2024, suggesting a deliberate effort by the firms to reduce their debt exposure.

This is according to Nairametrics analysis of the 2025 audited financial statements of major fast-moving consumer goods (FMCG) companies led by Nestlé Nigeria Plc, with the largest borrowing as well as debt repayment. The debt reduction comes amid sustained cost pressures and a high-interest-rate environment.

While most firms like Nestle Nigeria Plc, Nigerian Breweries Plc, Guinness Nigeria Plc, Unilever Nigeria Plc, Vita Foam reduced their liabilities, a few outliers, such as PZ Cussons, recorded an increase in debt.

Nestlé Nigeria Plc, Nigerian Breweries Plc, Guinness Nigeria Plc, Unilever Nigeria Plc, Honeywell Flour Mills, and Vitafoam and other FMCGs recorded substantial reductions in their debt profiles, reflecting deliberate financial restructuring efforts.

Overall, the financial data show a broad-based effort among FMCG firms to cut down on debt despite macroeconomic headwinds, signaling a strategic effort by companies to strengthen their balance sheets and reduce financial risks.

The reduction in debt exposure across FMCG companies has translated into a notable decline in interest expenses, easing pressure on profitability. This trend underscores the financial benefits of deleveraging, particularly in a high-interest-rate environment.

These improvements highlight how lowering debt levels has helped companies preserve earnings and improve overall financial stability.

Financial experts attribute the deleveraging trend to lessons learned during the financial strain experienced between 2023 and 2024. They note that companies are now prioritizing sustainability and efficiency in their capital structures.

Experts also emphasized the importance of diversifying funding sources, including capital market instruments, to reduce reliance on expensive bank loans.

Nigeria’s corporate debt crisis between 2023 and 2024 was largely triggered by foreign exchange reforms introduced by the Central Bank of Nigeria, which led to a sharp devaluation of the naira. Companies with significant foreign currency obligations saw their debt burdens increase dramatically as the weaker naira inflated liabilities.

This experience has driven the current wave of deleveraging in 2025, as companies prioritize balance sheet strength, reduce reliance on costly borrowings, and position themselves for more sustainable growth.