The decision by the Central Bank of Nigeria (CBN) to let the market determine the value of the local currency has led to significant losses for eight prominent Nigerian firms. The naira’s fall from 461/$1 in December 2022 to 777/$1 in September 2023 has resulted in a recorded exchange loss of N918.1 billion.
The affected companies include Dangote Sugar Refinery Plc, Dangote Cement Plc, Nestle Nigeria Plc, Nigerian Breweries Plc, Guinness Nigeria Plc, MTN Nigeria Communications Plc, Airtel Africa Plc, MRS Oil Nigeria Plc, and Seplat Energy Plc.
The World Bank has identified the naira as one of the worst-performing currencies in Africa, losing nearly 40% of its value since June. This depreciation has particularly impacted Dangote Sugar, which reported a revaluation loss of N90.99 billion.
Dangote Cement recorded a revaluation loss of N99.02 billion, while Nestle reported a loss of N143.4 billion due to the recent devaluation of the naira. MRS Oil recorded N2.37 billion in losses, and Seplat Energy reported N16.38 billion.
Nigerian Breweries faced a N86.83 billion revaluation loss, and MTN Nigeria recorded a forex loss of N232.8 billion on its net foreign currency liabilities. MTN Nigeria also highlighted difficulties in raising foreign exchange for its capital expenditure needs.
Airtel Africa reported a foreign exchange loss after tax of $317 million (N246.31 billion), citing the devaluation of the Nigerian naira in June 2023 as a significant contributing factor. Both MTN and Airtel documented challenges in meeting their foreign exchange obligations, including limited supply in local monetary systems impacting payments to international suppliers.