Despite inflation Moderation, FX Stability, 20 Companies Report N19.81trn OPEX

Kayode Tokede 

Despite gradual decline in inflation rate to 15.51 per cent and stability in the foreign exchange market, a total of 20 listed companies on the Nigerian Exchange Limited (NGX) declared N19.81 trillion total operating expenses in 2025. This represents about a 13.8 per cent increase over N17.4 trillion operating expenses reported in  2024.

Operating expenses is mostly considered to include cost of sales, administrative and distribution expenses. 

The 20 companies  are spread across oil & gas, manufacturing, telecommunications, Fast-Moving Consumer Goods (FMCG), Power generation, among others.

The significant increase in the operating expenses was against the backdrop of inflationary pressure, exchange rate volatility, and rising input costs.

Aside from inflationary pressure, the plummeting of the naira at the foreign exchange market, the other key factors contributing to these companies’ operating expenses include: high cost of power, transportation of goods and services, among others.

The average price of naira at the Nigerian Foreign Exchange Market (NFEM) appreciated to N1,436.31 against the dollar in 2025 from N1,536.51 against the dollar in 2024, fueled by the government’s decisions to remove the subsidy on petrol and the Central Bank of Nigeria (CBN) policy on the Naira at the foreign exchange market.

The prolonged Russia-Ukraine war induced strain in the global supply chain and has continued to cause an increase in the cost of raw materials for manufacturers, particularly as both countries rank among the top 10 producers of wheat.

THISDAY analysis of their results showed that Oando Plc, followed by Seplat Energy Plc and Dangote Cement Plc recorded the highest operating  expenses by value in the period under review.

Oando, thus declared N3.46 trillion total operating expenses in 2025, down by 23.7 per cent from N4.54 trillion reported in 2024. 

On the other hand, Seplat Energy reported N3.17 trillion total operating expenses in 2025, an increase of 133 per cent from N1.36 trillion in 2024, while Dangote Cement reported N2.58trillion total operating expenses in 2025, about 3.8 per cent increase over N2.48 trillion in 2024. 

While these companies have largely returned to profitability after grappling with foreign exchange losses in the previous year, their earnings improvements remain modest for the most part.

The prevailing macro economic headwinds, particularly persistent inflation and a weak naira, continue to exert downward pressure on margins.

Although there is some level of stability in foreign exchange, the impact of 2023 and 2024 currency depreciation continues to impact input prices and supply chains.

Many of the firms continue to feel the ripple effects of high import costs and elevated raw material expenses, which are yet to fully ease despite improved FX liquidity and clearer monetary policy direction.

Analysts told THISDAY that the hike in the inflation rate, among others, contributed to operating expenses, not only affecting manufacturing companies’ profit generation, but also dividend payout.

The CEO of, Centre for Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, stated that inflationary pressures remain a key concern in the Nigerian economy, both for businesses and the citizens.

He highlighted that the implications of a high inflation rate include escalation of production and operating costs for businesses, leading to erosion of profit margins, drop in sales, decline in turnover, weak manufacturing capacity utilisation, and high food prices, which adversely affect citizens’ welfare and aggravate poverty.