Foreign-owned companies operating in Nigeria are increasing the fees paid to their overseas parent groups, with seven firms listed on the Nigerian Exchange (NGX) remitting a combined N129.4 billion in royalties, licence, technical and management fees in the first nine months of 2026.
The payments, disclosed in the companies’ unaudited third-quarter financial statements, represent a 7.7 per cent increase from the N120.1 billion recorded in the corresponding period of 2025, highlighting the growing financial commitments of Nigerian subsidiaries to their foreign parent companies.
A breakdown of the figures shows that the increase in these payments outpaced revenue growth at three companies — HBM Nigeria, International Breweries and Nigerian Breweries. International Breweries recorded the widest gap, as its technical and management fees increased at a rate approximately 10 times faster than its revenue.
At Nestlé Nigeria, the combined cost of royalties, shared-service charges and interest on loans from its Swiss parent company exceeded the profit available to all shareholders during the period.
Although the payments are legitimate and approved by the Nigerian technology-transfer regulator, the National Office for Technology Acquisition and Promotion (NOTAP), their growing scale comes as several of the companies continue to recover from the financial difficulties caused by the naira's sharp depreciation in 2023 and 2024.
The currency crisis significantly increased foreign-denominated liabilities, wiping out shareholders' equity at four of the companies and forcing some multinational parents to inject fresh capital, convert shareholder loans into equity or provide other forms of financial support.
Nestlé's fees and interest exceed shareholders' profit
Nestlé Nigeria accounted for one of the largest payment obligations, with its 70.81 per cent shareholder, Switzerland-based Société des Produits Nestlé SA, receiving substantial sums through licence fees, shared-service charges and interest payments.
The company recorded N34.8 billion in general licence fees during the nine-month period, compared with N32.3 billion in the corresponding period of the previous year.
It also incurred N16.5 billion in shared-service costs payable to Nestlé Central and West Africa. Combined, the two expenses amounted to N51.2 billion, representing approximately 5.2 per cent of revenue, the highest ratio among the seven companies.
The financial burden increased further when interest payments on intercompany loans were included. Nestlé Nigeria paid N58.5 billion in interest, bringing its combined fees and interest obligations to approximately N110 billion.
This was higher than the N103.4 billion profit after tax recorded for all shareholders during the period.
Despite the substantial payments, the company's operating performance improved considerably, with revenue increasing by 10.4 per cent to N976.5 billion, while profit before tax rose 52 per cent to N193.9 billion.
Chief Executive Officer, Wassim Elhusseini, described the performance as the company's “eighth consecutive quarter of profitability since returning to profit in Q4 2024.”
Nestlé Nigeria's shareholders' equity also strengthened significantly, rising to N116.3 billion from N12.9 billion in December 2025. This represents a remarkable recovery from negative equity of N112.1 billion recorded two years earlier, following the impact of naira depreciation on its foreign-currency loans.
Separately, the company's parent has proposed transferring its Nigerian waters and premium-beverages business into Peranel, a 50-50 joint venture with Platinum Equity. The transaction remains subject to shareholder and regulatory approval.
Technical and management fees grow faster than revenue
The trend of rising payments to foreign parent companies was also evident in the brewing and manufacturing sectors.
At HBM Nigeria, formerly Lafarge Africa and now controlled by China's Huaxin Building Materials, technical service fees increased by 28 per cent to N21.7 billion, outpacing the company's 19 per cent revenue growth.
The company's agreement provides for a technical service fee equivalent to three per cent of net sales, subject to a ceiling of five per cent of earnings before interest, taxes, depreciation and amortisation (EBITDA).
International Breweries, majority-owned by companies within the Anheuser-Busch InBev group, recorded N11.7 billion in technical management fees, representing a 23 per cent increase. Its revenue, however, grew by just 2.1 per cent.
Similarly, Nigerian Breweries, controlled by Heineken, booked N28.9 billion in royalties and technical service fees, an increase of 12 per cent, while revenue rose by 5.4 per cent.
The brewer also disclosed that its sales volumes declined during the third quarter.
However, the reported fees do not necessarily represent cash already transferred abroad. Nigerian Breweries' outstanding obligations to Heineken and its affiliates for royalties and technical service charges stood at N90.6 billion at the end of September, compared with N55.4 billion a year earlier.
HBM Nigeria also owed Huaxin N29 billion in technical fees, up from N6.6 billion in December 2025.
The growing balances indicate that some of the charges have accumulated faster than the subsidiaries have settled them, potentially creating additional cash outflows in subsequent periods.
Parent companies inject capital to repair balance sheets
The increase in payments to foreign owners comes against the backdrop of significant financial support provided by multinational parent companies to their Nigerian subsidiaries following the currency crisis.
The sharp depreciation of the naira in 2023 and 2024 increased the local-currency value of foreign-denominated debts, pushing Nestlé Nigeria, Nigerian Breweries, Guinness Nigeria and MTN Nigeria into negative shareholders' equity.
Several parent companies subsequently intervened to strengthen their subsidiaries' financial positions.
Heineken participated in Nigerian Breweries' N599.1 billion rights issue in 2024, increasing its ownership from approximately 56 per cent to 72.9 per cent.
The brewer has since cleared its borrowings, which stood at N269.3 billion in September 2024, and reported cash holdings of N77.3 billion at the end of September 2026.
International Breweries also benefited from a major capital restructuring after AB InBev converted a $379.9 million shareholder loan into equity in 2024.
The company has since eliminated its bank debt. In September 2026, it used its share premium to wipe out accumulated losses before returning N84 billion in capital to shareholders.
Approximately N82 billion of the distribution went to companies within the AB InBev group, which collectively own 97.42 per cent of International Breweries. The company's free float stands at just 2.55 per cent.
Cadbury Nigeria also received balance-sheet support after Mondelez International converted a $7.7 million loan into shares, increasing its stake in the company to 79.39 per cent.
MTN Nigeria recorded further improvements in its financial position, reducing borrowings to N333.3 billion from N527.7 billion in December 2025.
The telecommunications company reported net cash of N47.7 billion after paying N860.8 billion in dividends. Its shareholders' equity also recovered to N843.9 billion from a negative N573.6 billion two years earlier.
Cadbury Nigeria's borrowings declined by 35 per cent to N14.9 billion.
Nestlé Nigeria, however, remains the most indebted among the companies highlighted. Its borrowings fell to N426.3 billion from N476 billion in December 2025 and approximately N685 billion in September 2024.
A significant portion of the debt is owed to its parent company, which also earns interest from the outstanding loans.
Guinness Nigeria, acquired by Singapore-based Tolaram Group from Diageo in 2024, reported N41 billion in loans and overdrafts against cash holdings of just N1.4 billion.
Guinness, Beta Glass and Cadbury record lower fees
Not all the companies increased payments to their foreign owners, as Guinness Nigeria, Beta Glass and Cadbury Nigeria recorded declines in their respective charges.
Guinness Nigeria's royalty and technical fees fell by 15 per cent to N9.8 billion, even as revenue increased by 20.4 per cent.
Under its new ownership, the company continues to pay Diageo for the use of the Guinness brand through licensing and royalty agreements established as part of the acquisition.
Beta Glass, which was sold by Greece's Frigoglass to Helios Investment Partners in February, discontinued management service charges that had cost the company N1.3 billion during the corresponding nine-month period in 2025.
However, it continues to pay technical know-how fees equivalent to three per cent of net sales, amounting to N3.9 billion during the period.
Cadbury Nigeria's payments to Mondelez International also declined by eight per cent to N2.2 billion.
Despite the reduction in fees at some subsidiaries, foreign investors have continued to strengthen their ownership positions in the Nigerian businesses.
Tolaram increased its stake in Guinness Nigeria to approximately 71 per cent through a mandatory takeover offer in 2025 and continued purchasing shares in August.
Similarly, investment holding companies associated with Helios increased their ownership of Beta Glass to 72 per cent from 70 per cent.
MTN Group, which owns approximately 75.6 per cent of MTN Nigeria, has also suspended plans for a proposed sale of shares to local investors.
Meanwhile, MTN Nigeria was excluded from the overall N129.4 billion fee calculation because its earnings release does not separately disclose payments made to MTN Group.
The figures highlight the growing financial relationship between multinational companies and their Nigerian subsidiaries, particularly as the latter rebuild their balance sheets following years of currency-related losses.