How Nigeria’s biggest companies turned reform into cash

…Operating cash flows have surged across sectors, revealing the corporate side of Nigeria’s economic adjustment.

Three years after President Bola Tinubu launched the most ambitious economic reforms in decades, the balance sheets of Nigeria’s largest listed companies show that corporate cash generation has surged far faster than profits.

An analysis of 27 companies listed on the Nigerian Exchange shows that aggregate operating cash flows among many of the country’s biggest firms rose to N6.6 trillion in the first quarter (Q1) of 2026, a 247 percent increase from N1.9 trillion reported in Q1 2023, the last comparable quarter before the reforms took effect in May of that year.

In profit, these firms reported N3.08 trillion in Q1’26, compared to N1.16 trillion in Q1’23, representing a 165 percent rise.

The firms surveyed include Dangote Cement Plc, BUA Foods, MTN Nigeria, BUA Cement, Seplat Energy, Lafarge Africa Plc, Zenith Bank, Guaranty Trust Holding Company Plc, First HoldCo Plc, Geregu Power Plc, Presco Plc, Stanbic IBTC Holdings Plc, Nigerian Breweries Plc, Nestle Nigeria Plc, Transcorp Hotels Plc, and International Breweries Plc.

Others include United Bank for Africa, Transcorp Power Plc, Ecobank Transnational Incorporated, Okomu Oil Palm Plc, Access Holdings Plc, Fidelity Bank Plc, Wema Bank Plc, Dangote Sugar Refinery Plc, Unilever Nigeria Plc, Guinness Nig Plc, and FCMB Group Plc.

The improvement comes despite an economy that has experienced steep currency depreciation, persistent inflation, and sharply higher borrowing costs since 2023. The contrast highlights one of the most important economic realities of the reform era: while households have faced a significant squeeze in purchasing power, many large corporations have emerged with stronger cash-generating capacity.

For investors, that distinction matters.

Profits can be influenced by accounting treatments, exchange-rate gains, fair-value adjustments, and other non-cash items. Operating cash flow is harder to manipulate because it reflects actual cash generated from business operations. For investors, stronger cash generation matters because it improves a company’s ability to pay dividends, service debt, and fund future expansion.

The numbers suggest that many of Nigeria’s largest firms are emerging from the reform era with stronger cash positions than they had before the policy changes began.

The reforms that shaped corporates in Nigeria

The most significant reforms introduced by the Tinubu administration were the removal of fuel subsidies and the unification of the foreign exchange market in 2023. These were later complemented by tighter monetary policy, tax reforms, electricity tariff adjustments, and efforts to improve fiscal revenues.

The reforms initially triggered severe disruptions.

According to the National Bureau of Statistics (NBS), the national average retail price for Premium Motor Spirit (petrol) across Nigeria was N264.29 per litre before subsidy removal to N1,288.54 in March 2026

Logistics costs surged, production expenses increased, and the naira depreciated from around N460/$ in early 2023 to above N1,500/$ by the first quarter of 2026. Following exchange-rate liberalisation.

On the other hand, inflation accelerated to a decade high of 22.04 percent in March 2023, forcing companies to reprice products repeatedly.

Yet the same reforms also eliminated several distortions that had constrained businesses for years.

According to Muda Yusuf, chief executive officer of the Centre for the Promotion of Private Enterprise (CPPE), the first three years of President Bola Tinubu’s administration were largely focused on restoring macroeconomic stability after inheriting significant fiscal, monetary, and foreign exchange challenges, noting that the benefits of the reforms have yet to translate into broad-based welfare gains.

He said fiscal conditions were also strained by entrenched Ways and Means financing and a fuel subsidy regime that had become a major source of fiscal leakages and economic distortions.

Yusuf identified fuel subsidy removal and exchange rate unification as the two major reforms underpinning the administration’s economic stabilisation agenda.

However, he noted that both reforms came with significant adjustment costs. “The immediate consequence of the reforms was a significant inflationary shock. Energy prices surged, transportation and logistics costs escalated, production expenses increased sharply, and the depreciation of the naira amplified imported inflation pressures,” Yusuf said.

According to him, the reforms contributed to declining real incomes, worsening poverty conditions, and a cost-of-living crisis. Despite the challenges, Yusuf said there was evidence of macroeconomic recovery.

He stated that external reserves had improved significantly, gross reserves were approaching $50 billion, the balance of trade remained in surplus, investor confidence had strengthened, and exchange rate volatility had moderated since 2025.

Why cash is growing faster than profits The surge in operating cash flow reflects more than higher sales. It reveals how Nigeria’s largest companies have adapted to the reform environment.

Firms with strong market positions have been able to pass rising costs to consumers through higher prices. Banks benefited from elevated interest rates and stronger treasury income. Export-oriented companies and firms with dollar-linked revenues gained from currency depreciation, while several businesses improved working-capital management after years of foreign-exchange shortages.

The result is that cash generation has grown faster than accounting profits. Across many sectors, the reforms created short-term pain for consumers but improved liquidity conditions for dominant corporations.

Cement giants emerge as major winners

No sector illustrates the transformation better than cement.

In Q1 2023, Dangote Cement generated N115 billion in net operating cash flow. Three years later, the figure has jumped to N591 billion.

The increase of more than 413 percent significantly outpaced profit growth over the same period.

The company has benefited from stronger pricing power, higher selling prices, and the ability to pass rising costs to consumers. Revenue rose from N406 billion in Q1 2023 to N1.19 trillion in Q1 2026, while profit surged by 194 percent.

Even more impressive is the fact that operating cash flow exceeded profit by N270 billion in Q1 2026, indicating that earnings are being converted into real liquidity.

Lafarge Africa recorded an even more dramatic turnaround.

The company generated just N13 billion in net operating cash flow in Q1 2023. By Q1 2026, that figure had increased to N139 billion despite periods of negative cash flow in between.