Foreign-owned subsidiaries, Like Airtel Africa, MTN Nigeria, Nestle, Guinness and many others trading in the Nigerian Exchange have accrued over N900 billion in foreign exchange losses as of the nine-month period ending September 2023 due to the abrupt and humongous drop in the value of the Naira on June 14, 2023.
Over the past two weeks, the naira’s exchange rate has consistently swung between N750/$ and N900/$ at the official market, even hitting N996 at a point.
However, the currency has consistently stuck around the N1100/$ mark in the parallel market. The consistent pendulum swing of the Naira is a potential source of another set of humongous foreign exchange losses among these companies.
For most of the foreign-managed companies trading on the Nigerian Exchange (NGX), the currency devaluation caused unrealized foreign exchange losses. While for some, it created gains, an example being insurer AXA Mansard which recorded a foreign exchange gain of N3.63 billion during the nine months.
According to the financial statement of these companies, Airtel Africa suffered the highest loss among these companies, accruing a foreign exchange loss of $471 million which amounted to N404 billion in the first nine months ending September 2023.
This loss caused the company to record a loss after tax of $13 million during the first half of 2023.
Another telecom giant, MTN Nigeria, a subsidiary of MTN Group accumulated N232.8 billion in foreign exchange losses during the nine months ending 2023, marking a 735 per cent year-on-year growth from the same period in 2022.
