How High Interest Rates Are Pushing Nigerian Companies to Sell More Shares

Borrowing in Nigeria has become too expensive for many companies. With the monetary policy rate around 27% and commercial lending rates commonly in the 30% range sometimes up to 36% more listed firms are choosing to raise money by selling shares instead of taking bank loans.

Equity funding is attractive for one simple reason: it does not come with fixed interest repayments. 

When debt is priced that high, the cost can wipe out profits or force companies to divert cash meant for operations into servicing loans. Selling shares gives companies capital without immediate repayment pressure.

₦1.72 trillion raised by non-banks since mid-2024

Since June 2024, non-bank companies have raised a combined ₦1.72 trillion on the Nigerian Exchange (NGX) through rights issues, public offers, and private placements. 

This is separate from banks, which have raised about ₦2.55 trillion in equity largely due to recapitalisation requirements.

Meanwhile, NGX market value has grown sharply. Total market capitalisation rose from about ₦40.9 trillion at the start of 2024 to about ₦106.2 trillion by January 13, an increase of roughly ₦65.3 trillion. 

But only about ₦5.2 trillion of that growth came from new listings, and the market has recorded just six new listings in the past two years. Most of the activity has come from existing listed companies raising fresh capital and benefiting from share price gains.

The biggest share sellers: Nigerian Breweries and International Breweries

Two companies dominate the non-bank equity raises in the period: Nigerian Breweries raised ₦548.7 billion from a 2024 rights issue. It aimed for ₦599 billion and achieved 91.6% subscription.

International Breweries sought ₦588 billion and raised ₦516.2 billion, with 87.8% subscription.

Together, they raised about ₦1.06 trillion, roughly 62% of total non-bank equity raised since June 2024. They were also the only non-bank equity raisers in 2024.

In 2025, the pace increased sharply. The number of non-bank firms raising equity rose to 13, led by Presco.

Presco, Ellah Lakes, Champion Breweries: equity for acquisitions and expansion

In 2025, companies increasingly used equity to fund acquisitions and scale operations rather than borrow at high rates.

Presco raised ₦237 billion through a rights issue concluded in December 2025. The company used equity funding to support a major acquisition choosing share funding instead of expensive bank debt.

Ellah Lakes concluded a ₦235 billion public offer, aimed at financing its acquisition of ARPN, which holds a 22,000-hectare plantation in Edo State and includes an integrated palm oil mill and a cassava processing facility.

Champion Breweries is seeking ₦58 billion, ₦16 billion via rights issue and ₦42 billion via public offer to fund its acquisition of the Bullet energy drink brand.

Other raises are for capacity expansion and capital strengthening, VFD Group is raising ₦50 billion via rights issue to strengthen capital and fund expansion (with market expectations that part may support Abbey Mortgage Bank’s transition).

Fidson Healthcare raised ₦21 billion via rights issue to expand manufacturing capacity.

Industrial and Medical Gases raised ₦5.8 billion to finance expansion and improve production capacity.

Equity is also being used to fix weak balance sheets

High rates are not the only issue. Many manufacturers were hit by currency depreciation and higher costs for imported inputs. This pushed some companies into losses and heavy debt.

The brewers used equity not mainly to bring in cash, but to restructure obligations.

They first obtained shareholder approval to convert loans owed to their foreign parent companies into equity. Then they carried out rights issues to create the share structure needed for the conversion.

This allowed;

International Breweries to eliminate a $379.9 million loan owed to AB InBev.

Nigerian Breweries to clear outstanding debt to Heineken.

The result was balance sheet relief less recorded debt and improved shareholder funds, without relying on new bank borrowing.

What this trend means

As long as lending remains this expensive, more Nigerian corporates will keep raising funds by selling shares because it is cheaper than borrowing and easier to manage over the long term.