Nigeria’s consumer goods sector is breathing a sigh of relief as inflationary pressures ease and the naira shows signs of recovery, following a steep 41 percent depreciation in 2024.
This comes as a welcome development for the Fast-Moving Consumer Goods (FMCG) sector, which has battled foreign exchange volatility, insecurity in food-producing regions, and unfavourable government policies in recent years. These headwinds led to significant margin erosion, weakened equity, and FX-related losses.
However, with volatility in the FX market subsiding and inflation beginning to cool, analysts say the sector is poised for a rebound — driven by renewed domestic consumption and reduced input cost pressures.
According to the National Bureau of Statistics (NBS), Nigeria’s inflation rate fell to 23.18 percent in February 2025, down from an average of 32 percent in 2024. The Central Bank of Nigeria (CBN), in response, has raised the Monetary Policy Rate (MPR) to a record 27.5 percent in a bid to tame inflation further.
At the same time, the naira has shown relative stability. It strengthened to N1,531.25/$1 on Monday — a 0.4 percent (N5.57) gain from N1,536.82/$1 last Friday, according to CBN data.
“We anticipate a sector-wide recovery in 2025,” analysts at CardinalStone Research said. “This rebound will be supported by improving macroeconomic conditions, which should boost household consumption and ease input cost pressures.”
They added that moderating prices of petroleum products — driven by lower global crude oil prices and improved local supply — will help sustain the downward inflation trend.
Additionally, ongoing product innovation and expanded distribution networks by key industry players are expected to boost sales and support profitability.
To assess the scope of recovery, BusinessDay reviewed the financial performance of five major players in the consumer goods space: BUA Foods, Unilever Nigeria, Nestlé Nigeria, Dangote Sugar Refinery, and Nigerian Breweries.
BUA Foods
BUA Foods delivered its highest-ever annual revenue of N1.53 trillion in 2024 — more than double the N729.4 billion reported in 2023, according to its audited financial results.
The company attributed the milestone to increased demand for its core products — sugar, flour, and pasta — supported by expanded production capacity, strategic pricing, and deeper market penetration across Nigeria.
Despite incurring an N178 billion exchange loss due to currency depreciation, BUA Foods’ pre-tax profit surged 162.9 percent to N284.3 billion, up from N108 billion. After-tax profit also rose 137.3 percent to N265.99 billion, reinforcing the company’s strong position in the FMCG space.
Earnings per share (EPS) jumped 145.3 percent to N15.27, reflecting enhanced shareholder value.
“The results underscore our agility and resilience,” said Ayodele Abioye, Managing Director of BUA Foods. “Looking ahead, we remain optimistic and will continue to focus our operations and strategic investments on addressing food supply challenges.”
Dangote Sugar
Dangote Sugar Refinery Plc reported a significant deepening of losses in 2024, as higher production costs and foreign exchange losses weighed on its bottom line.
The company posted an after-tax loss of N192.6 billion, nearly tripling the N73.8 billion loss recorded in 2023.
Production costs soared by 79 percent to N634.6 billion, driven largely by raw materials (N546.1 billion), direct overheads (N52.02 billion), freight (N18.3 billion), direct labour (N9.13 billion), and depreciation (N9.05 billion).
“Dangote Sugar’s net loss in FY’24 was primarily due to rising production costs and significant FX losses,” CardinalStone analysts noted.
Still, they believe the company stands a chance of rebounding in 2025, amid a more stable naira and easing inflationary pressures.
Unilever Nigeria
Unilever Nigeria has maintained steady profitability over the past four years, rebounding from a N4 billion loss in 2020.
In 2024, the company posted an after-tax profit of N15.1 billion, up from N8.4 billion in 2023, despite a challenging economic environment marked by high inflation and exchange rate fluctuations.
Revenue rose to N149.5 billion, the company’s highest in at least five years, driven by strong domestic demand.
The nutrition segment led the charge, growing 46.8 percent to N92.83 billion. Personal care and beauty & wellbeing segments also posted solid year-on-year growth of 32.8 percent and 72.5 percent, respectively.
“The nutrition unit remains Unilever’s cash cow,” said Nathaniel Disu, an investment analyst at Afrinvest West Africa. He added that the company’s decision to divest from its home care segment in 2023 has helped streamline operations and reduce legacy losses.
“It’s no surprise they’ve also increased their marketing spend,” Disu noted.
Nestlé Nigeria
Nestlé Nigeria’s full-year profit rose to N164.5 billion in 2024, up from N79.4 billion in 2023, while revenue surged by 75 percent to N958.8 billion, driven by strong local demand.
After posting a N36.4 billion loss in Q4 2023, the company returned to profitability in Q4 2024 with a net profit of N19.7 billion.
Analysts project that Nestlé’s revenue will surpass N1.05 trillion in 2025, supported by capacity expansion, moderate price adjustments, and an expanded distribution network.
“We expect continued growth momentum in 2025,” CardinalStone said in a research note.
Nigerian Breweries
Nigerian Breweries reported a revenue increase of 79 percent in 2024, reaching N1.07 trillion, up from N599.5 billion in 2023.
However, the brewer also posted a deeper loss after tax of N144.3 billion, compared to N105.8 billion in the previous year — largely due to naira depreciation and rising operational costs.
“The combination of inflation and currency devaluation drove up raw material costs and other input prices,” the company said in its financial statement.
Despite these challenges, the company is optimistic about the future. It has initiated a recapitalisation via a rights issue and completed the acquisition of a majority stake in Distell Wines and Spirits Nigeria Limited to diversify its portfolio.
Juliet Anammah, Chair of the Board of Directors, said: “Stability in economic policies and declining interest rates are expected to create a more favourable investment landscape. Lower borrowing costs will enable companies to scale operations and fund growth projects.”
Conclusion:
After two turbulent years, Nigeria’s consumer goods sector is finding room to breathe. While challenges remain, the macroeconomic turnaround — led by a firmer naira and falling inflation — is setting the stage for a broad-based recovery across the FMCG space in 2025.
Source: BusinessDay Nigeria, audited financial reports of companies cited.
