This study investigated the impact of macroeconomic variables on the debt financing decisions of listed food and beverage firms in Nigeria from 2015 to 2024. The research was motivated by the volatile economic climate in Nigeria, characterized by hyperinflation and currency instability, which creates significant challenges for corporate capital structure management. The population comprised thirteen (13) firms listed on the Nigerian Exchange Group (NGX), including industry leaders such as BUA Foods Plc, Dangote Sugar Refinery Plc, and Nigerian Breweries Plc. Using a panel data research design, secondary data were sourced from the annual reports of the selected firms, the Central Bank of Nigeria (CBN) Statistical Bulletin, and the National Bureau of Statistics (NBS). The study employed descriptive statistics, unit root tests, and panel regression analysis. The Hausman specification test (p-value = 0.0002) indicated that the Fixed Effects Model (FEM) was the most appropriate and consistent estimator for the study. The empirical results revealed that inflation (INFR) and exchange rate (EXR) have a positive and statistically significant impact on debt financing, suggesting that firms are often “pushed” into higher leverage by rising operational costs and currency devaluation. Conversely, the Monetary Policy Rate (MPR) showed a negative and significant relationship, confirming that high borrowing costs deter new debt intake. GDP growth (GDPG) was found to have a positive influence on debt, aligned with the Trade-off Theory during economic expansion. The study concludes that corporate leverage in Nigeria is largely reactive to external macro-shocks. It recommends that firms utilize hedging instruments to mitigate exchange rate risks and calls for the CBN to implement targeted lower-interest credit schemes for the food sector to ensure operational sustainability.
Keywords: Macroeconomic Variables, Debt Financing, Fixed Effects Model, Nigeria, Food and Beverage Firms, Capital Structure.
