About 22 companies listed on the Nigerian Exchange Limited (NGX) carried a combined debt of approximately N21.3 trillion in the second quarter of 2026, reflecting varying levels of reliance on borrowed funds to finance their operations and expansion.
An analysis of available financial data shows that 11 of the companies recorded debt-to-equity ratios above 2.0, indicating that their debt levels were at least twice their reported shareholders’ equity.
The companies 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 Mortgage Bank and Fortis Global Insurance.
FTN Cocoa records highest leverage
FTN Cocoa Processors recorded the highest debt-to-equity ratio at 28.61, meaning its reported debt was about N28.61 for every N1 of shareholders’ equity.
More Read
It was followed by SCOA Nigeria at 14.37 and United Capital at 6.52.
Other companies with debt-to-equity ratios above 2.0 included:
- Nestlé Nigeria — 5.74
- Fortis Global Insurance — 4.66
- UACN — 4.10
- Neimeth International — 3.29
- Mecure Industries — 3.00
- MTN Nigeria — 2.98
- VFD Group — 2.40
- Infinity Trust Mortgage Bank — 2.18
A debt-to-equity ratio measures a company’s debt relative to shareholders’ equity. A ratio of 1.0 means debt is equivalent to equity, while a ratio of 2.0 means debt is twice the reported equity.
More Read
However, analysts caution that the ratio should not be considered in isolation because acceptable leverage can vary significantly across industries.
Access Holdings has highest debt
The data also showed significant differences in the absolute amount of debt carried by the companies.
Access Holdings recorded the highest total debt at approximately N7.27 trillion, followed by:
- Ecobank Transnational Incorporated — N5.36 trillion
- MTN Nigeria — N2.78 trillion
- Aradel Holdings — N1.87 trillion
- United Capital — N1.22 trillion
- BUA Cement — N663.34 billion
- Dangote Sugar — N584.61 billion
- Nestlé Nigeria — N445.11 billion
- UACN — N308.78 billion
- VFD Group — N252.17 billion
Other companies recorded debt ranging from N9.31 billion to N129.66 billion.
Negative equity raises additional concern
SCOA Nigeria’s reported debt-to-equity ratio of 14.37 is accompanied by negative shareholders’ equity of approximately N563.76 million.
Negative equity means the company’s reported liabilities exceed its assets, resulting in a negative equity position. This makes the company’s capital structure different from that of businesses with positive shareholders’ funds and requires additional scrutiny when assessing leverage.
More Read
FTN Cocoa Processors, meanwhile, reported debt of N22.42 billion against equity of approximately N783.65 million, producing its debt-to-equity ratio of 28.61.
United Capital reported debt of approximately N1.22 trillion and equity of N187.09 billion, resulting in a ratio of 6.52.
Analysts urge investors to look beyond debt ratios
Analysts noted that a high debt-to-equity ratio does not automatically mean that a company is in financial distress.
Ambrose Omordion, Analyst and Chief Operating Officer at Investdata Consulting, said investors should also examine earnings, cash flow, interest coverage, debt maturity profiles and how borrowed funds are being deployed.
He noted that leverage can amplify returns when borrowed funds are invested profitably, but can also increase financial pressure when earnings and cash flows deteriorate.
Companies with high leverage combined with weak profitability, negative shareholders’ funds or declining cash flows may therefore require closer scrutiny.
Some of the companies in the data had considerably lower leverage. BUA Cement recorded a debt-to-equity ratio of 1.01, while Aradel Holdings was at 1.22, AIICO Insurance 1.20, C&I Leasing 1.50, Conoil 1.62 and Ecobank Transnational Incorporated 1.50.
Economic implications
Economic analyst and communications expert Clifford Egbomeade said corporate debt should be assessed alongside the quality of earnings, cash-generation capacity, assets, interest obligations and the sector in which a company operates.
He noted that corporate borrowing can support economic activity when funds are directed towards productive investments, including manufacturing expansion, telecommunications infrastructure and other capital projects.
However, excessive leverage could place pressure on companies if financing costs rise, consumer demand weakens or foreign-currency obligations become more expensive.
Highly indebted companies may respond to financial pressure by reducing capital expenditure, postponing expansion, disposing of assets or cutting employment.
Corporate debt levels are also relevant to lenders because difficulties in servicing loans could affect the quality of assets held by banks and other financial institutions.
The figures therefore highlight the importance of prudent borrowing, sustainable cash flows, adequate capitalisation and strong corporate governance when assessing the financial position of listed companies.
