In 2025, Nigeria’s manufacturers are reaping the fruits of inflation. Income are swelling, not as a result of factories are producing extra, however as a result of they’re charging extra.
When revenue margins outpace the price of gross sales, it often indicators one factor: costs have risen. And for a lot of Nigerian producers, that’s the defining story of 2025.
A BusinessDay evaluate of nine-month monetary statements from chosen listed firms reveals a transparent sample. Corporations throughout each the patron and industrial items sectors have leveraged inflation to elevate their costs, and, by extension, their revenues.
However this development is pushed extra by pricing than productiveness. Producers are incomes extra not by promoting higher volumes, however by promoting the identical items at greater costs.
Take Nestlé Nigeria, for instance. The corporate reported a 33 p.c year-over-year enhance in income for the 9 months ended September 2025. Over the identical interval, its price of gross sales rose by simply 22 p.c, leading to a 58 p.c enhance in gross revenue. Nestlé’s gross margin climbed to 37 p.c in 9M 2025, up from 31 p.c a 12 months earlier.
Nestlé is just not an remoted case. This sample of rising revenues and not using a proportional spike in prices runs throughout the board.
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EBITDA margins inform an even bigger story
Ordinarily, firms would possibly justify greater costs as a response to rising operational bills. However their EBITDA margins inform a distinct story. Nestlé’s EBITDA margin rose to 23.7 p.c in 9M 2025, about 6.7 proportion factors greater than the 17 p.c recorded a 12 months earlier.
The cement majors, Dangote, BUA, and Lafarge, present the identical inflation-driven profitability. Their common EBITDA margins climbed to 44.5 p.c in 9M 2025, up 12.2 proportion factors from 32.3 p.c in 2024. Isolating solely their Nigerian operations, the mixed common margin jumps even greater, to 49.2 p.c, making them among the greatest beneficiaries of Nigeria’s inflationary surge.
Though inflation has declined sharply in 2025, from round 30 p.c in 2024 to 18.02 p.c as of September 2025, producers have nonetheless discovered room to lift costs aggressively. Some observers argue that, when adjusted for inflation, these positive aspects are much less spectacular than they seem.
Nevertheless, knowledge from some producers present that costs haven’t solely saved tempo with prices, they’ve additionally outpaced them.
Utilizing the common inflation fee of twenty-two.2 p.c recorded within the first 9 months of 2025, the actual margins tracked by BusinessDay have risen considerably. Nestlé’s actual EBITDA margin in 9M 2025, for instance, stands at 19.4 p.c, in contrast with 12.8 p.c in 2024 after adjusting for inflation.
It’s broadly understood that when costs rise quicker than prices, an organization’s margins enhance.
Cement and beer are large winners
For cement makers, this impact is especially pronounced. Dangote Cement’s gross margin, after factoring inflation, was 48.5 p.c, nearly 10 proportion factors greater than the 39 p.c recorded in 2024. Lafarge Africa’s actual gross margin reached 47.8 p.c, about 10 proportion factors greater than the 37 p.c recorded a 12 months earlier. BUA Cement’s gross margin, post-inflation adjustment, stood at 41 p.c.
The beer makers inform the same story. Nigerian Breweries posted a gross margin of 40 p.c in 9M 2025, up from 29.5 p.c in the identical interval of 2024. After adjusting for inflation, its gross margin was 32.6 p.c. With further cost-cutting measures, the group’s working margin jumped to fifteen.8 p.c, from 3.8 p.c in 9M 2024.
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But, not all sectors get pleasure from such pricing energy. In additional aggressive markets, companies face limits in elevating costs. Unilever’s gross margin, for instance, remained regular at 41 p.c between 9M 2024 and 9M 2025. Operational enhancements, nonetheless, helped increase its working margin to twenty p.c, from 10 p.c a 12 months earlier.
Cadbury skilled modest positive aspects. Its gross margin rose to 23.3 p.c in 9M 2025, from 16.5 p.c in 9M 2024, development, however not on the similar tempo as different producers.
Muda Yusuf, CEO of the Centre for Promotion of Personal Enterprises, explains why: “Pricing energy differs throughout sectors relying on demand elasticity. Corporations in extremely aggressive shopper markets can’t simply increase costs with out shedding prospects, and this compresses their margins.”
He provides, “However in sectors like cement, the place demand is much less elastic, firms can push costs up extra simply.”
