In a year marked by tightening liquidity and macroeconomic turbulence, some of Nigeria’s most influential companies, Dangote, MTN, BUA, Nestlé Nigeria, Seplat, and others, were hit hard by surging interest expenses, collectively racking up a staggering N1.42 trillion in finance costs in 2024 alone.

That figure represents a 146% spike from the previous year, reflecting the sharp impact of the Central Bank of Nigeria’s aggressive monetary tightening policies.

The CBN, in its bid to curb runaway inflation and maintain positive real returns, ratcheted up the Monetary Policy Rate multiple times throughout the year.

But while the policy moves might have scored points on macroeconomic prudence, they inflicted real damage on corporate Nigeria’s profit margins.

An in-depth analysis of 2024 audited financials from 10 publicly listed giants, spanning sectors from telecoms to consumer goods to energy, reveals that interest costs have grown heavy enough to erode operating performance and flip earnings into losses in several cases.

Taken together, these companies earned N3.93 trillion in operating profits, but N1.416 trillion, or roughly 36% of that, went straight into debt servicing.

For context, their combined loan book ballooned by 58.57% within one year, leaping from N5.12 trillion in 2023 to N8.12 trillion by 2024.

The dual burden of higher interest rates and aggressive borrowing formed a perfect storm that many are still struggling to navigate.

Nigerian Breweries saw its interest expense rise slightly to N98.01 billion, a modest 0.28% increase, but that figure still outpaced the company’s operating profit by 40%.

The brewer’s interest coverage ratio plunged to 0.71x from 1.22x, while foreign exchange losses of N158 billion pushed it into deeper losses.

The company ended 2024 with a pre-tax loss of N182.9 billion, compared to N145.2 billion in 2023.

At Nestlé Nigeria, interest expenses shot up 169% year-on-year to N101.82 billion, as the company’s debt obligations swelled to N653.70 billion from N402.32 billion.

Servicing that debt ate up more than 60% of operating profit.

Nestlé also recorded a crushing N291 billion in FX losses, resulting in a pre-tax loss of N221.59 billion—more than double its N104.03 billion loss the year prior.

With a debt-to-asset ratio of 76% and interest coverage ratio down to 1.67x, the company’s fundamentals remain fragile.

One of the few bright spots was Seplat Energy.

Though its interest costs jumped to N127 billion due to a $350 million Revolving Credit Facility and a $300 million Advance Payment Facility, Seplat managed to grow its operating profits fast enough to maintain financial stability.

Its interest coverage ratio actually improved from 4.08x to 5.10x, with interest making up just 19.6% of operating profit.

This strength helped drive a 316% spike in earnings per share to N386.61, even though its share price remained flat at N5,700 since December 2024.

MTN Nigeria, however, faced severe challenges.

It posted N422.94 billion in interest expenses, including N250.87 billion in lease liabilities.

Despite reducing its total debt by 17% to N972.92 billion, the telco still saw its interest costs soar, thanks to interest rates that climbed from a range of 12–18% to as high as 35%.

MTN’s interest coverage dropped to 1.84x from 3.39x, while it recorded a massive N925.36 billion in FX losses, culminating in a pre-tax loss of N550 billion.

Yet, market sentiment remained positive, with the stock gaining 22.5% year-to-date as of April 10, 2025, after falling 24.24% in 2023.

Dangote Cement was the biggest spender on interest, with costs totaling N448.08 billion, a 210% increase from the prior year.

The company’s debt surged by N1.54 trillion to reach N2.51 trillion, while interest rates spiked above 25%.

Its net debt-to-equity ratio nearly tripled, rising from 0.30 to 0.95, and interest coverage dropped to 2.57x from 5.08x, signaling considerable pressure on earnings capacity.

Other major corporates weren’t spared either.

Dangote Sugar Refinery paid N92.37 billion in interest, BUA Cement N56.11 billion, BUA Foods N29.91 billion, Aradel Holdings N22.21 billion, and Lafarge Africa (WAPCO) N17.89 billion.

2024 has been a year of reckoning for Nigerian companies navigating a high-rate environment.

While firms like Seplat demonstrated resilience through strong earnings and financial discipline, others, particularly consumer-facing brands contending with volatile exchange rates, struggled under the weight of rising finance costs and diminished investor confidence.

With interest rates still elevated heading into mid-2025, companies with weaker cash flows and higher leverage may continue to face significant hurdles.

For investors, the writing is on the wall: track interest coverage, net debt, and FX exposure religiously before placing bets in Nigeria’s increasingly expensive debt landscape.