Nigerian corporates spend N1 trillion on capital investment in 2020

Corporate Nigeria invested an estimated N1 trillion on property, plants and equipment in the financial year ended December 2020. This represents a 3.4% increase year on year, as the elite companies spent a total amount of N1.06 trillion on capital investment in 2020.

The data was compiled by Nairalytics and sourced from the cash flow statements of thirty of the most capitalized companies on the Nigerian Stock Exchange.

For a year marked by Covid-19 induced lockdown, widespread insecurity, and social unrest, corporate Nigeria still invested more than they ever did since we started collating this data for about 5 years. In 2019 a total of N1.03 trillion was spent while N823.5 billion was invested in 2018.

Three of Nigeria’s largest listed organisations topped the list of major spenders doling out a combined N571.4 billion, about half the amount disbursed as cash.

MTN topped the list with about N214.9 billion in property, plant and expenditure expenses followed by cement giant Dangote Cement. Fierce rival, BUA Cement came third with about N146.1 billion.

On a sector basis, the manufacturing sector topped the list, as Nigeria’s major cement players spent about 65% more on property, plant and equipment perhaps buttressing the fierce competition in the space.

Out of the N366 billion spent in 2020, Dangote Cement and BUA alone dished out N356.4 billion. Lafarge only invested N9.9 billion in 2020, by far the lowest of the three and much lower than the N22.3 billion spent in 2019.

BUA and Dangote Cement have been at loggerhead over the last few years as they struggle for market share across the country. But while nearly all of BUA’s spending is in Nigeria alone, Dangote Cement also expends a significant amount of money in other parts of Africa.

The banking sector spent a total of N285.7 billion to expand capacity in 2020Eleven Nigerian banks spent a sum of N287.7 billion to expand their operating infrastructure in 2020, 26.5% lower than what they jointly spent on property, plant and equipment in 2019, with Ecobank doling out a total N113.9 billion compared to N147.0 billion the bank spent in 2019.

UBA and GT bank spent N33.4 billion and N31.4 billion respectively on PPE in 2020, while Nigeria’s largest lender by asset value, Access bank spent a total of N29.2 billion on capital investments in 2020, down from the N37.5 billion it spent in 2019.