Nigeria’s consumer goods firms are now spending less to finance their loans, as borrowing costs falls to its lowest level in three years, BusinessDay analysis has shown.
An analysis of the first half of 2026 financial performance of nine consumer goods companies shows that combined interest expense on borrowings fell by 25.8 percent to N77.64 billion from N104.78 billion in H1 2025, representing a decline of roughly N27.14 billion, or 25.9 percent.
Similarly, the companies’ compiled loans and borrowings during the period also fell by 32 percent to N832 billion from N1.1 trillion reported during the period.
While companies such as BUA Foods, Cadbury Nigeria, Unilever Nigeria, Nascon Allied Industries Plc, International Breweries, and Nigerian Breweries recorded significant reductions in borrowing costs, Champion Breweries, Nestlé Nigeria, and Dangote Sugar Refinery saw their interest expenses increase.
According to the World Bank, countries with stronger disclosure requirements, such as audited financial statements and transparent ownership structures, tend to have lower corporate borrowing costs, as more companies are able to access bond markets.
BUA Foods leads debt-cost reduction
Among the companies, BUA Foods recorded one of the strongest improvements in financing costs.
The company’s interest expense on borrowings fell from N10.1 billion in H1 2025 to N5.27 billion in H1 2026, representing a reduction of approximately N4.83 billion, or 47.8 percent.
The decline suggests a substantial easing in the cost of financing for the food manufacturer and represents one of the clearest improvements among the companies analysed.
Cadbury, Unilever maintains low financing burden
Cadbury Nigeria also recorded a substantial reduction in its financing burden. Interest expense fell from N2.13 billion in H1 2025 to N937 million in H1 2026, a decline of about N1.19 billion, or 56 percent.
The company therefore moved from spending more than N2 billion on borrowing costs in the first half of 2025 to less than N1 billion a year later.
Unilever Nigeria recorded a more modest but positive improvement. Its interest expense on borrowings declined from N356 million in H1 2025 to N218 million in H1 2026, representing a 38.8 percent decrease.
Unilever’s borrowing cost remains significantly below those of the highly leveraged companies in the group. Nascon Allied Industries maintained the lowest financing burden among the companies analysed.
Its interest expense declined from N114 million in H1 2025 to about N75 million in H1 2026, a reduction of roughly 34 percent.
The company’s relatively low interest expense highlights a much lighter borrowing burden compared with companies such as Nestlé Nigeria, Nigerian Breweries and Dangote Sugar.
This provides Nascon with a degree of insulation from the impact of elevated domestic interest rates, as a smaller proportion of earnings is absorbed by finance costs.
For brewers, International Breweries reduced its interest expense on borrowings from N337 million in H1 2025 to N115 million in H1 2026, representing a 65.9 percent decline.
The fall is particularly notable given the broader financial pressures facing the brewing industry, including elevated production costs, foreign-exchange pressures and weak consumer purchasing power.
Nigerian Breweries didn’t report any interest on its borrowing cost in the first six months of 2026. However, the H1 2025 data its interest expense on borrowings stood at N27.7 billion.
Nevertheless, its H1 2025 figure places Nigerian Breweries among the most significant users of borrowing in the sector and highlights the importance of financing costs to the performance of Nigeria’s major brewers.
These companies’ financing costs rose
The most dramatic increase came from Champion Breweries; the brewer’s interest expense surged from N544 million in H1 2025 to N4.9 billion in H1 2026, representing a more than eightfold increase.
The increase stands out because it runs counter to the broad reduction recorded across several other companies. Similarly, Nestlé Nigeria continued to carry by far the largest borrowing-related interest expense among the companies in the analysis.
Its interest expense increased slightly from N45.8 billion in H1 2025 to N46.1 billion in H1 2026, representing an increase of approximately N300 million, or 0.7 percent.
At N46.1 billion, Nestlé’s interest expense alone accounted for almost 60 percent of the combined H1 2026 interest expense of the companies. This means that movements in Nestlé’s financing costs have an outsized effect on the aggregate picture for the sector.
Dangote Sugar Refinery recorded another increase in financing costs. Interest expense rose from N17.7 billion in H1 2025 to N20.1 billion in H1 2026, an increase of N2.4 billion, or 13.6 percent.
What the numbers reveal about the sector
The figures are particularly important because consumer goods companies are operating in an environment where profitability is being squeezed from several directions.
Manufacturers continue to contend with high raw-material costs, energy expenses, logistics costs, foreign-exchange volatility, and subdued consumer purchasing power.
In such an environment, financing costs can determine whether revenue growth translates into stronger bottom-line earnings.
A company that increases sales but carries substantially higher finance costs may see much of the benefit absorbed below the operating-profit line. Conversely, companies that reduce borrowing costs can improve earnings even without equivalent growth in revenue.