FMCG Costs Rise as Nigerian Manufacturers Review Distribution and Cash Flow

First-half 2026 results show mixed performance among listed Nigerian consumer-goods companies. A six-company review recorded combined revenue of ₦2.09 trillion, down 3.9% year-on-year, while selling, distribution and administrative costs rose 13.9% to ₦236.4 billion. The decline was driven largely by BUA Foods and Dangote Sugar, while the other four companies recorded combined revenue growth. The figures do not prove that FMCG demand is falling across the board. They point instead to differing effects from commodity prices, product mix, operating conditions and company-specific performance. Manufacturers considering product-line cuts should measure whether customers move to replacement products and whether delivery costs per unit rise or fall. Working-capital decisions should go beyond inventory levels. Companies need to monitor stock days, customer-payment days, supplier-credit days and slow-moving inventory by product and warehouse. The September 2026 MPR cut may ease pressure, but each business should assess its actual borrowing costs, fees and repayment terms. The key test for portfolio rationalisation is whether it improves contribution margin and cash generation after distribution, inventory and financing costs. Companies should distinguish genuine savings from costs shifted to distributors and retailers.

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