Amid continued foreign exchange (FX) volatility and high inflation, Nigerian companies are turning to strategic price adjustments, debt restructuring, and equity conversions to survive massive FX losses incurred between 2023 and early 2024. But while these recovery strategies are cleaning up corporate books, they are also fuelling an affordability crisis, leaving many Nigerians struggling to keep up with relentless price hikes.
Exclusive financial reviews by our correspondent and industry insiders show that several companies—especially those with significant exposure to dollar-denominated liabilities—have adopted aggressive pricing strategies, some raising prices by over 100 per cent across key products. This, experts warn, could push more consumers into poverty, as real wages stagnate and inflation continues to bite.
The fallout from Nigeria’s currency liberalisation in 2023 left many businesses grappling with steep exchange rate differentials. The naira’s rapid depreciation wiped out billions in shareholder value, pushed firms into negative equity territory, and created urgent liquidity crises.
To counteract this, leading companies like Nestlé Nigeria, MTN, Cadbury, and Dangote Cement adopted pricing strategies, raised capital, and in some cases, swapped debt for equity to remain afloat.
For Nestlé, which posted a ₦36.4 billion loss in Q4 2023, the strategy paid off. By Q4 2024, the food and beverage giant had turned the tide, reporting a ₦19.7 billion profit. This dramatic rebound was driven by a 95 per cent revenue boost and full repayment of its $20 million inter-group FX loan, alongside a series of steep price hikes.
Nestlé’s popular products doubled in price: Milo (1kg) surged from ₦2,800 to ₦5,500, Nescafé Classic went from ₦2,500 to ₦5,000, and Maggi seasoning rose nearly 70 per cent. The company’s average prices increased by 31.3 per cent quarter-on-quarter in Q3 2024 alone.
Similarly, MTN Nigeria slashed its FX-related losses by ₦300 billion within three months after increasing telecom tariffs by 50 per cent. The telecom giant posted a profit after tax of ₦133.7 billion in Q1 2025 and appears on track for record-breaking earnings by year-end.
Cadbury Nigeria and PZ Cussons opted for debt-to-equity swaps, issuing new shares to parent firms in exchange for debt relief. While this diluted shareholders’ interests, it freed up capital and restored financial health. Cadbury has already returned to profitability in Q1 2025.
President of Highcap Securities, David Adonri, noted that companies such as MTN, Guinness, and Nestlé have shown resilience by swiftly adapting to Nigeria’s volatile macroeconomic environment. “These companies have recovered from deep FX wounds largely due to strategic pricing, cost controls, and debt restructuring,” he said.
Patrick Ajudua, President of the New Dimension Shareholders Association, added that firms could stabilise further through debt-to-equity conversions, backward integration, and export expansion to generate forex and reduce exposure.
Ajudua also warned that converting dollar liabilities to naira is essential to avoid repeated currency shocks: “Companies that continue to depend on imported raw materials must either localise their inputs or be ready to perpetually face FX risks.”
The brewing sector saw some of the most visible price increases. Nigerian Breweries raised prices thrice between February and April 2024. Star Lager, Heineken, and Legend Stout saw price hikes ranging from 36 per cent to 66.7 per cent. Guinness Nigeria raised prices by up to 85.7 per cent as part of a broader strategy to cut FX exposure. The company is eyeing a return to profitability in Q2 2025.
In the cement sector, Dangote Cement absorbed ₦249 billion in FX losses from its international operations. Despite this, it posted a ₦503.2 billion profit in 2024—up 10 per cent from 2023—thanks to a 101 per cent increase in turnover and strong pricing power. Yet, analysts warn that its FX losses will take at least two more years to fully clear.
Dangote Sugar, however, suffered a ₦172.2 billion FX loss and recorded a pre-tax loss of ₦108.9 billion in 2024. The company’s reliance on imported inputs has left it highly vulnerable, with experts estimating a minimum three-year recovery window unless the naira stabilises.
BUA Foods, another major player, absorbed ₦188 billion in FX losses in 2024. Yet, it posted a 167 per cent surge in profit, thanks again to price adjustments.
While businesses applaud the success of these strategies, Nigerian consumers are bearing the brunt. With food inflation hitting record highs and transportation, telecom, and basic consumer goods doubling in cost, many households now spend nearly 100 per cent of their income on essentials.
Industry analyst Tunde Amolegbe of Arthur Steven Asset Management says the outlook remains grim: “Price increases are a double-edged sword. They protect company margins but erode consumer spending. Unless the naira stabilises and inflation eases, we may see reduced consumption that could undermine long-term profitability.”
As 2025 unfolds, hopes hinge on macroeconomic stability. If the naira strengthens and inflation declines, companies could gradually rebuild, restore dividend payments, and regain investor confidence.
But if FX instability persists, experts warn more firms could collapse or face distress. In the meantime, Nigerian consumers are being squeezed tighter by the day—paying the price for a corporate recovery fuelled by survival, not sustainability.