N4.53tn cash pile shows Nigerian firms betting on yields, not factories.

Non-financial heavyweights in Africa’s largest oil producer are piling cash in their balance sheet as a cushion against an economic downturn.

Non-financial listed firms collectively have total cash and cash equivalents of N4.53 trillion in their books as at the first nine months of 2025, which is 5.31 percent higher than 2024’s N4.31 trillion, according to data gathered by MoneyCentral.

Airtel Africa, Seplat Energy, MTN Nigeria, Aradel, Dangote Cement, Lafarge Africa, and BUA Cement make up 70.12 percent of the total N4.31 trillion cash hoard.

It is important to note that a huge cash pile can provide a shock absorber against downturns, fund acquisitions, and fund future expansion plans without the need to tap the debt market for capital.

It can also minimise tax liabilities, as well as fund shareholder dividends and buybacks.

However, such huge cash could suggest that the c0mpany is not investing in lucrative new projects and acquisitions that earns investors a higher return. Of course, excess cash spoke to angry activist investors to demand higher returns in the form of a bumper dividend.

The gradual economic recovery presents an opportunity for these companies who are sitting on massive war chests to start spending some of this cash as to deliver higher returns for shareholders.

According to the National Bureau of Statistics (NBS), in Q2-25, the Nigerian economy grew by 4.23 percent year on year (yoy) in real terms. This marks an improvement from the 3.48 percent yoy growth recorded in Q2-24, and the 3.13 percent yoy growth observed in Q1-25.

Nigeria’s inflation continued its deceleration, moderating to 16.1 percent year-on-year (YoY) in October compared to 18.0 percent in the prior month, according to the latest CPI data released by the National Bureau of Statistics (NBS).

While strong liquidity is good for individual firms, this widespread corporate hoarding has mixed implications for the broader economy.

It demonstrates the resilience and healthy liquidity of many large Nigerian companies, giving them the “firepower” to weather future economic shocks.

However, when companies prefer to sit on cash or invest in low-risk financial assets rather than reinvesting in plant, machinery, and capacity expansion, it constrains real economic growth, job creation, and productivity in the manufacturing and industrial sectors.