Cost Efficiency Bolsters Manufacturer’s Profit Amid Slow Revenue Growth

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Consumer goods firms in Africa’s most populous nation have overcome the foreign exchange (FX) volatility, soaring inflation and higher energy costs as they maintained profit growth that gives investors hope of dividend payment, but sustained pressure on household spending undermines revenue.

The combined sales of the largest and most liquid firms on the NGXASI index stood at N3.53 trillion in the first six months of 2026, which is 1 percent higher than 2025’s N3.50 trillion, according to data gathered by MoneyCentral.

Dangote Sugar and BUA Foods suffered a (-8.92 percent) and (-16.15 percent) drop at the top line (sales), while five out of the ten firms on the index recorded single digit growth.

In the last ten years, consumer spending has been under pressure as spiraling inflation continues to steal workers’ wages, impoverishes the people, and disrupts asset prices.

High unemployment means the preponderance of Nigerians do not have enough cash in their purse to buy consumer goods products that have become a luxury.

To exacerbate the already anemic situation of impecunious consumers is the removal of subsidy on fuel and the transition to the floating of the exchange rate in 2023 forced companies to hike the price of their products, which led to skyrocketing costs of goods on the shelves of supermarkets and traditional markets.

“Unlike firms in highly regulated sectors, like telecommunications, consumer goods companies exercised greater flexibility in adjusting prices to cushion margin pressures,” said analysts at Chapel Hill Denham Limited.

“Our market research reveals that several players pursued strategic price increases to offset the impact of rising costs on profitability. Beyond pricing, companies turned to product innovation to maintain affordability and protect…