Naira stability has driven the nation’s cement makers back to net foreign exchange (FX) gains, ending a loss streak that lasted for at least five years.
After seeing sharp FX losses in 2023 and 2024 due to currency devaluations, Dangote Cement, Lafarge Africa, and BUA Cement , Nigeria’s three publicly-listed cement giants, reported N49.5 billion in FX gains in the first half (H1) of 2025, reversing previous losses and boosting the overall profitability.
Of the three listed cement manufacturers, Dangote Cement, Africa’s largest producer, saw the sharpest rise, with a N45.7 billion FX gain in the reviewed period, up from a loss of N201.3 billion recorded in the same period in 2024.
In the same token, Lafarge Africa reported a turnaround of N3.06 billion in FX gain from a loss of N19.9 billion.
BUA Cement, owned by billionaire Abdul Samad Rabiu, also witnessed an FX gain of N782 million from a loss of N39.9 billion during the period under review.
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Adebayo Adebanjo, equity research analyst at Lagos-based consultancy CardinalStone, said Nigeria’s leading cement manufacturers are increasingly shifting their focus to local borrowing in response to the heavy FX losses incurred in recent years.
“The gains we are seeing now are largely a result of how the naira has strengthened,” Adebanjo said. “For companies that still hold some FX liabilities, the appreciation means their books reflect FX gains rather than losses.”
Adebanjo, who doubles as an investment analyst, stated that these companies had taken on long-term obligations denominated in foreign currencies under the previous FX regime and were “essentially caught in the wave of currency devaluation that occurred between 2023 and 2024.”
To mitigate further exposure, some firms have started repaying these foreign-denominated debts ahead of schedule. According to him, a key factor easing the financial burden has been the recent appreciation of the naira.
The naira, which plunged to record lows following the FX liberalisation of mid-2023, has seen relative stability since early 2025, buoyed by improved oil receipts, reforms in the FX market, and the Central Bank of Nigeria (CBN)’s clearance of FX backlog.
The local unit appreciated by over 25 percent against the dollar between January and June 2025, helping companies with dollar-denominated liabilities to record substantial FX gains.
According to Dangote Cement’s H1 earnings report, following a period of significant depreciation that marked it as one of the world’s most underperforming currencies throughout 2023 and 2024, the naira experienced relative stability in the first six months of 2025.
“This was supported by improved liquidity conditions, sustained interest in local fixed-income instruments, and renewed confidence in the Central Bank’s policy direction,” the cement manufacturer, which operates in about 11 African countries, said in a statement.
The earnings report added that despite these gains, the broader economic recovery remains uneven, constrained by structural bottlenecks and external shocks.
The various foreign exchange reforms implemented by the apex bank have helped to abolish the need for companies to lobby for FX, said Abdul Samad Rabiu, chairman of BUA Cement Plc, during the 9th Annual General Meeting
Rabiu said the new FX regime is more market-driven and transparent as opposed to the former FX rules, which created an artificial dollar shortage and widened the gap between the official and parallel markets.
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Foreign operations lift Dangote’s numbers
Analysts also point to foreign income and subsidiaries as critical drivers of the recovery. According to Matilda Adefalujo, an economic research analyst at Lagos-based Meristem Securities, Dangote Cement’s significant FX gain was partly aided by translation gains from its foreign operations across several African countries.
“Operations in markets like Senegal, Ethiopia, Cameroon, South Africa, Zambia, Tanzania, Congo, Ghana, and Sierra Leone likely contributed positively to the group’s FX position,” she said.
Strong demand fuels record profits
Cement makers in Nigeria are benefiting from demand as the government builds the 700-kilometer Lagos-Calabar coastal highway and rural roads. Real estate projects are also surging, with the sector now accounting for a third of the nation’s gross domestic product.
Arvind Pathak, CEO, Dangote Cement, said export volumes from Nigeria increased by 18.2 percent, with 18 successful clinker shipments made to Ghana and Cameroon.
“This demonstrates the growing importance of our pan-African footprint and our ongoing commitment to regional trade and self-sufficiency,” he added.
According to the cement makers’ financials, combined net profit rose to N834 billion in the first half (H1) of 2025, a 230 percent increase from the N252 billion in the corresponding period last year.
For Dangote Cement, its second quarter (Q2) profit was the highest in about six years, soaring to N309 billion from N76.6 billion a year ago.
Read also: FBNQuest analysts forecast 3.4% GDP growth, naira at N1,662/$ by year-end
Will FX gains be sustained?
Industry analysts believe the positive trend could continue if the naira maintains its current trajectory. However, uncertainty around oil prices, external reserves, and potential global shocks still poses risks.
“The FX gains we are seeing now are a short-term accounting boost, but companies will need to strengthen their balance sheets and manage exposures better going forward,” said analysts at CSL Stockbrokers, in a note.
