22 firms on NGX face debt exposure of N21.3trn
By Peter Egwuatu
Nineteen companies listed on the Nigerian Exchange Limited (NGX) reported a collective debt of N21.3 trillion in the second quarter of 2026, as they sought to finance operations and boost profitability.
Among these companies, 11 recorded debt-to-equity ratios exceeding 2.0, indicating a significant reliance on borrowed funds. This situation raises potential concerns regarding the impact of interest costs, cash flow pressures, and returns for shareholders.
The companies in this group include VFD Group, United Capital, UACN, TotalEnergies Marketing Nigeria, Tantalizers, SCOA Nigeria, Nestlé Nigeria, Neimeth International Pharmaceuticals, MTN Nigeria, Mecure Industries, Infinity Trust Mortgage Bank, FTN Cocoa Processors, Ecobank Transnational Incorporated, Dangote Sugar, Conoil, C&I Leasing, BUA Cement, Aradel Holdings, AIICO Insurance, Access Holdings, Abbey Bank, and Fortis Global Insurance.
High Debt-to-Equity Ratios
An analysis reveals that FTN Cocoa Processors has the highest debt-to-equity ratio at 28.61, followed by SCOA Nigeria with 14.37 and United Capital at 6.52. Other companies exceeding a ratio of 2.0 include Nestlé Nigeria (5.74), Fortis Global Insurance (4.66), UACN (4.10), Neimeth International Pharmaceuticals (3.29), Mecure Industries (3.0), MTN Nigeria (2.98), VFD Group (2.40), and Infinity Trust Mortgage Bank (2.18).
The debt-to-equity ratio indicates the extent to which a company finances its operations through debt relative to shareholders’ equity. A ratio of 1.0 suggests that debt equals equity, while a ratio of 2.0 indicates twice as much debt as equity. Analysts note that there is no universally accepted “normal” debt-to-equity ratio, as capital-intensive industries—such as manufacturing and telecommunications—can sustain higher leverage compared to firms in less capital-intensive fields.
Comparative Debt Levels
The data shows considerable variation in the capital structures of the companies surveyed. Total debt ranges from N9.31 billion for Tantalizers to N7.27 trillion for Access Holdings. Other notable figures include Ecobank’s total debt of N5.36 trillion, MTN Nigeria’s N2.78 trillion, Aradel Holdings at N1.87 trillion, and United Capital with N1.22 trillion.
Additional figures include BUA Cement (N663.34 billion), Dangote Sugar (N584.61 billion), Nestlé Nigeria (N445.11 billion), UACN (N308.78 billion), VFD Group (N252.17 billion), AIICO Insurance (N129.66 billion), Conoil (N72.05 billion), C&I Leasing (N71.67 billion), Mecure Industries (N66.17 billion), Fortis Global Insurance (N30 billion), and Infinity Trust Mortgage Bank (N27.16 billion). FTN Cocoa Processors recorded N22.42 billion in total debt, while Abbey Bank, SCOA Nigeria, Neimeth International, and Tantalizers reported debts of N20.37 billion, N12.41 billion, N9.33 billion, and N9.31 billion, respectively.
Notable Performers
FTN Cocoa Processors, with its debt-to-equity ratio of 28.61, has N28.61 of debt for every N1 of equity, based on a total debt of N22.42 billion and equity of approximately N783.65 million. SCOA Nigeria presents a particularly high ratio of 14.37, coupled with negative equity of N563.76 million. United Capital’s ratio of 6.52, supported by total debt of N1.22 trillion and equity of N187.09 billion, reflects substantial leverage.
Market Analysis
Access Holdings leads in equity value with N4.19 trillion, followed by Ecobank (N3.68 trillion), Aradel Holdings (N2.17 trillion), MTN Nigeria (N930.61 billion), BUA Cement (N659.13 billion), United Capital (N187.09 billion), Dangote Sugar (N170.36 billion), AIICO Insurance (N109.15 billion), VFD Group (N104.73 billion), and Nestlé Nigeria (N77.56 billion).
Other equity figures include UACN (N75.71 billion), TotalEnergies Marketing Nigeria (N52.49 billion), C&I Leasing (N49.5 billion), Conoil (N44.39 billion), Mecure Industries (N22.02 billion), Infinity Trust Mortgage Bank (N12.47 billion), Abbey Bank (N10.88 billion), Fortis Global Insurance (N6.44 billion), Tantalizers (N4.76 billion), Neimeth (N2.84 billion), FTN Cocoa (N783.65 million), and SCOA Nigeria (negative N563.76 million).
Analyst Insights
According to Ambrose Omordion, Chief Operating Officer at Investdata Consulting, a high debt-to-equity ratio should not be interpreted as an outright signal of distress for companies. He emphasized the importance of examining a company’s earnings, cash flow, interest-cover ratio, maturity profile of borrowings, and the intended use of debt.
“Earnings and cash flow must remain robust, as high leverage can amplify both gains and losses. When borrowed funds are used effectively, they can enhance shareholder returns; however, a heavily indebted company may struggle if its earnings decline,” Omordion said.
He noted that BUA Cement, with a debt-to-equity ratio of 1.01, along with other companies like Aradel Holdings (1.22), AIICO Insurance (1.20), Conoil (1.62), and C&I Leasing (1.50) maintain lower leverage levels.
Clifford Egbomeade, an economic analyst, echoed the sentiment that evaluating debt levels in isolation is insufficient. He highlighted the need for thorough consideration of earnings quality, cash generation capacity, asset base, interest obligations, and sector dynamics before concluding on financial risk.
Economic Impact
The overall debt position of listed companies has broader implications for the Nigerian economy. According to analysts, productive borrowing that funds expansion can boost economic growth, whereas excessive leverage may result in financial vulnerability.
“Companies facing heavy debt pressures might curb investments, reduce employment, and delay growth initiatives,” Egbomeade said, stressing the critical balance needed in borrowing practices and corporate governance.
As the dynamics of corporate debt continue to unfold, stakeholders in the Nigerian financial landscape are urged to engage in prudent borrowing practices to promote sustainable growth.
