Seven of the largest non-bank borrowers on the Nigerian Exchange cut their combined borrowings by about ₦2.26 trillion in the nine months to September. Dangote Cement alone shed ₦536 billion, nearly half of its debt. Nigerian Breweries owed ₦137 billion a year ago and now owes nothing. The paydown came mostly from cement, oil and telecoms.
Not everyone is deleveraging. BUA Cement, Julius Berger, VFD Group and Conoil added about ₦240 billion between them. The cost of borrowing also varies widely. Companies that can borrow from development lenders or foreign parents pay 8% to 10%. Those that rely on Nigerian banks pay close to 30%. That gap is now one of the clearest dividing lines in corporate Nigeria.
MTN Nigeria cut borrowings 37% to ₦333 billion after paying ₦860.8 billion in dividends. The telecom now earns more interest on its cash than it pays on its loans. A firmer naira helped by shrinking the naira value of dollar loans. Seplat recorded ₦99 billion of exchange differences on its borrowings. Nestlé Nigeria recorded a ₦33.9 billion unrealised exchange gain on its loans.
This mirrors the 2016 recession, when dollar loans became toxic after the naira was devalued. Companies with foreign parents survived. Those dependent on local banks struggled. The pattern is repeating. Big firms can refinance abroad or with related parties. Small firms cannot. They borrow at 30% and pass the cost to consumers.
The winners are Dangote Cement, MTN, Nigerian Breweries, Seplat and firms with foreign parents. The losers are small and medium enterprises that pay 30% interest, their workers who face cost-cutting, and consumers who absorb higher prices. For a manufacturer in Aba, a 30% loan is not working capital. It is a countdown to closure.
Winners: Large corporates; firms with foreign parents; banks lending to big borrowers.
Losers: SMEs paying 30%; workers facing cost cuts; consumers absorbing higher prices.
Bottom Line: Big firms are paying down debt because they can. Small firms are paying 30% because they must. That gap will decide which businesses survive the next shock.