Nigeria’s listed companies are moving to repair their balance sheets and finance new growth after a turbulent 2024 marked by steep currency devaluations and rising borrowing costs, according to a report by Bloomberg.

MTN Nigeria Communications Plc and Dangote Sugar Refinery Plc are among the major firms that have begun using profits to reduce negative equity positions. MTN, for instance, cut its negative shareholders’ equity to 42.5 billion naira (about 29 million US dollars) as of June, down from 458 billion naira at the end of 2023. Analysts say the trend reflects a broader corporate effort to stabilise finances and restore investor confidence.

The naira’s sharp depreciation since mid-2023 inflated foreign-currency debts, leaving several companies with liabilities exceeding assets. Elevated local interest rates further squeezed profits by increasing naira-denominated borrowing costs. “Many of these firms have now returned to profitability, supported by sustained revenue growth, tighter cost controls, declining FX losses, and strategic efforts to limit currency exposure,” said Segun Tunmbi, senior equity research analyst at CSL Stockbrokers.

Analysts expect stronger balance sheets to help restore valuations and attract renewed investor interest. “There is a need for the firms to close the negative position, because it’s not good for their valuation,” said Philip Anegbe, head of investment research at CardinalStone Partners Ltd. “The overall business environment is positive, so people are likely to embrace any decision they make to close negative equity, through rights issue or using profit.”

Nigeria’s corporate sector is emerging from a difficult adjustment period, with businesses seeking to restore financial strength as inflation and currency volatility gradually ease. The coming quarters will test whether recent gains in profitability can translate into sustainable recovery.