About 22 companies listed on the Nigerian Exchange Limited are carrying a combined debt of N21.3 trillion in the second quarter of 2026 as they borrow to fund operations and grow profits, according to data available to Vanguard.
Of the 22, 11 have debt-to-equity ratios above 2.0, showing heavy reliance on borrowed funds. This raises concerns over interest costs, cash flow pressure and returns to shareholders.
The companies are VFD Group, United Capital, UACN, TotalEnergies Marketing Nigeria, Tantalizers, SCOA Nigeria, Nestle Nigeria, Neimeth International Pharmaceuticals, MTN Nigeria, Mecure Industries, Infinity Trust Mortgage Bank, FTN Cocoa Processors, Ecobank Transnational Incorporated, Dangote Sugar, Conoil, C and I Leasing, BUA Cement, Aradel Holdings, AIICO Insurance, Access Holdings, Abbey Bank and Fortis Global Insurance.
According to Vanguard, FTN Cocoa Processors has the highest ratio at 28.61, followed by SCOA Nigeria at 14.37 and United Capital at 6.52. Others above 2.0 are Nestle Nigeria at 5.74, Fortis Global Insurance at 4.66, UACN at 4.10, Neimeth at 3.29, Mecure Industries at 3.0, MTN Nigeria at 2.98, VFD Group at 2.4 and Infinity Trust Mortgage Bank at 2.18.
The debt-to-equity ratio shows how much debt a company uses compared to shareholders’ funds. A ratio of 1.0 means debt equals equity. A ratio of 2.0 means two naira of debt for every one naira of equity. There is no single normal ratio for all companies. Capital intensive sectors like manufacturing and telecoms can carry more debt, but very high debt can raise financial risk when interest rates are high or cash flow is weak.
According to Vanguard, total debt varies widely. Tantalizers has the lowest at N9.31 billion while Access Holdings has the highest at N7.27 trillion. Ecobank Transnational has N5.36 trillion, MTN Nigeria has N2.78 trillion, Aradel Holdings has N1.87 trillion and United Capital has N1.22 trillion. Others include BUA Cement at N663.34 billion, Dangote Sugar at N584.61 billion and Nestle Nigeria at N445.11 billion.
On equity, according to Vanguard, Access Holdings leads with N4.19 trillion, followed by Ecobank at N3.68 trillion, Aradel Holdings at N2.17 trillion and MTN Nigeria at N930.61 billion. At the lower end, FTN Cocoa has N783.65 million while SCOA Nigeria has negative equity of N563.76 million, which means its liabilities are more than its equity.
According to analysts, high leverage alone does not mean a company is in trouble. Ambrose Omordion, Chief Operating Officer at Investdata Consulting, said investors should also look at earnings, cash flow, interest cover and how the debt is used. He said debt can boost returns when used well, but it can also cause problems if earnings drop. He added that companies like BUA Cement at 1.01, Aradel Holdings at 1.22 and AIICO Insurance at 1.20 have much lower leverage.
Economic analyst Clifford Egbomeade said debt should not be judged alone. Quality of earnings, cash generation and sector differences matter. He said corporate borrowing can help the economy when used for expansion, jobs and infrastructure, but too much debt across many companies can create risk, especially with high finance costs and foreign currency loans.
According to analysts, when companies are under heavy debt pressure, they may cut investment, reduce staff or delay expansion. This can also affect banks if repayments fail. They stressed the need for strong corporate governance, careful borrowing and adequate capital.
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