Twenty of Nigeria's largest publicly traded companies spent a combined N19.81 trillion on day-to-day business operations in 2025. This figure, representing their total operating expenses (OPEX), marks a 13.8% increase from the N17.4 trillion reported in 2024.
What Operating Expenses Include
Operating expenses cover the regular, ongoing costs of running a business. This includes employee salaries, rent, utilities, marketing, raw materials, and logistics. A rise in OPEX indicates companies are spending more just to maintain operations—which can squeeze profit margins and potentially lead to higher prices for consumers.
The Macroeconomic Paradox
The increase comes amid two seemingly favorable economic shifts. First, Nigeria's headline inflation rate declined to 15.51% in 2025, down from previous highs. Second, the naira appreciated on the official foreign exchange market, with the average rate improving to N1,436.31 per dollar from N1,536.51 in 2024.
A stronger naira should, in theory, reduce the cost of imported goods, machinery, and dollar-denominated inputs. However, the double-digit rise in OPEX suggests that local cost pressures—such as domestic fuel prices, wage demands, logistics bottlenecks, and regulatory costs—have outweighed any relief from currency appreciation.
A Tale of Two Companies
The data reveals stark differences across sectors and firms. Oando Plc, for example, reported a 23.7% reduction in operating expenses, bringing its OPEX down to N3.46 trillion in 2025. In contrast, Seplat Energy and several consumer goods and manufacturing firms recorded significant increases.
This divergence points to varying levels of exposure to local versus imported inputs, efficiency gains, and sector-specific challenges.
What This Means for the Economy
Rising operational costs for major corporations can have ripple effects across the economy. If companies cannot absorb these increases, they may be forced to reduce expansion plans, cut jobs, or raise prices—potentially undermining recent gains in inflation moderation.
Investors will be watching upcoming quarterly reports closely to see if this trend persists and how it impacts profitability and dividend payouts.
