Nigerian companies with the highest external debt

A recent analysis of 32 Nigerian companies listed on the NGX has revealed varying levels of external debt among these firms. While some businesses managed to reduce their borrowings, others continue to face challenges due to high financing costs, limited equity positions, and insufficient cash coverage. The total outstanding interest-bearing borrowings across these companies decreased by 26.9% in the first nine months of 2026, reaching N7.92 trillion as of September 30, 2026, from N10.83 trillion in December 2025.

Of particular concern are ten companies with the highest debt levels. MTN Nigeria reported N333.32 billion in outstanding borrowings, while UAC of Nigeria had N262.63 billion. Presco and Transcorp followed with N140.26 billion and N131.82 billion in outstanding debt, respectively. Collectively, these ten companies accounted for N7.21 trillion in total borrowings.

However, the sheer size of outstanding borrowings does not necessarily indicate financial distress. Some companies possess strong earnings and substantial cash generation to support their debt obligations, while others have smaller debt balances that put greater pressure on their financial resources. To better understand the situation, the analysis also examined whether companies generated sufficient earnings and operating cash flow to service their debt, rather than focusing solely on absolute borrowing levels.

Among the companies with high debt levels, FTN Cocoa Processors stands out due to the size of its borrowings relative to its financial resources. At September 30, 2026, the company reported total borrowings of N21.95 billion, down 5.4% from N23.21 billion in December 2025. Nevertheless, its shareholders' equity was only N1.23 billion, and operating profit, when excluding foreign exchange gains, would have resulted in a marginal loss.

The increase in finance costs and decline in operating cash flow have raised concerns about the company's ability to service its debt.

TotalEnergies Marketing Nigeria also warrants attention due to its rising borrowing exposure. Although the company generated a strong operating profit of N19.16 billion in 9M 2026, its interest coverage was only 1.56 times, indicating a significant recovery from a low of 0.28 times in 9M 2025. Conoil, with shareholders' equity of N44.55 billion, had a debt-to-equity ratio of 1.45 times, and its cash generation was insufficient to cover its financing obligations.

This analysis highlights the importance of considering factors beyond absolute borrowing levels to assess a company's financial health. Debt sustainability depends on various factors, including operational performance, cash generation, and the company's ability to generate sufficient future cash returns from its investments.