Nigeria’s manufacturing sector is demonstrating a troubling paradox with revenue climbing, but profits failing to follow. An analysis of recent filings submitted to the Nigerian Exchange (NGX) reveals that while several listed manufacturers posted modest topline growth in the first quarter of 2026, crippling input costs and lingering currency volatility have devoured their margins.
From cement giants to household goods producers, the story remains consistent as imported raw materials remain painfully expensive, forcing companies to run faster just to stand still.
The most surprising reports came from BUA Cement Plc, which recently announced a strong sales performance. While the company more than doubled its profit after tax (driven largely by industry-wide price hikes), its financial statements reveal an intense struggle to control the cost of production.
For the three months ending March 31, 2026, BUA Cement spent a staggering N153.08 billion on cost of sales. This cost base was heavily weighted by energy consumption, which alone cost the firm N67.34 billion, while materials added another N27.31 billion.
Without the substantial boost from rising cement prices (which surged roughly 30 per cent industry-wide), these energy and material costs would have severely undercut the company’s bottom line.
In the consumer goods space, Unilever Nigeria Plc reported a mixed bag in its Q1 2026 results. The maker of Knorr and Lux recorded a revenue increase to N59.1 billion, but the cost of keeping factories running grew at an alarming rate.
Unilever’s cost of sales surged by 15.77 per cent year-on-year to N32.5 billion. While the company managed to grow its gross profit due to pricing strategies, the strain of rising operational expenses from logistics to packaging reflects the broader pressure on manufacturers who rely on a mix of local and imported raw materials. The most dramatic example of currency volatility’s destructive power, however, has been the recovery struggle at Dangote Sugar Refinery Plc.
Unlike the cement makers who can source limestone locally, sugar refiners depend heavily on imported raw sugar. Although the company staged a “profit comeback” in Q1 2026, swinging from a massive loss to a N20.6 billion pre-tax profit, this rebound was almost entirely due to a sharp decline in raw material costs from N176.9 billion to N113.9 billion.
Industry observers note that this volatility highlights the extreme sensitivity of Nigerian manufacturing to the naira’s valuation against the dollar when the currency stabilises, profits return; when it wobbles, losses mount. Lafarge Africa Plc, another major cement producer, told a similar story of highvolume spending when it released its full-year 2025 results earlier this year. For the year ended December 31, 2025, the company’s cost of sales stood at N448.94 billion.
