Banks and Manufacturers Overcome Economic Challenges to Post Impressive Profits and Dividends in 2024
Despite Nigeria’s economic struggles, including high inflation, a depreciating naira, and rising interest rates, both banks and manufacturing companies have managed to defy economic headwinds in 2024. Six major banks, Zenith Bank, Guaranty Trust Holding Company, United Bank for Africa, Fidelity Bank, Stanbic IBTC Holdings, and Wema Bank—declared a combined profit after tax of N3.41 trillion, a significant increase from the previous year’s N2.1 trillion. Furthermore, 43 listed companies proposed total dividends of N1.67 trillion, a positive sign for the economy despite its challenges.
The impressive earnings are largely attributed to forex windfalls and substantial income generated from investments in public debt. These factors allowed banks to offset the negative impacts of inflation and reduced purchasing power on many sectors. Cement companies, such as Dangote Cement and BUA Cement, saw substantial profits driven by strong export activities and the ongoing demand for building materials from public sector projects.
Financial analysts and experts have highlighted that large corporations, especially in the banking sector, were able to leverage alternative revenue sources, such as fees and commissions, insulating them from broader economic struggles. While consumer purchasing power remains weak, the banking sector’s profitability remains strong due to its diversified revenue streams. In contrast, smaller businesses and import-dependent companies have faced greater losses.
Manufacturers, however, are seeking support from the government to improve the operating environment. The president of the Manufacturers Association of Nigeria (MAN), Otunba Francis Meshioye, emphasized that the success of ongoing fiscal and monetary reforms would be key to driving growth in the sector. He called for improvements in productivity, infrastructure, and competitiveness, arguing that a revitalized manufacturing sector is essential for Nigeria’s economic recovery and growth.
Source: Leadership