Naira Depreciation Cost Nigerian Companies Over N2trn in Foreign Exchange Losses
- Nigerian companies have recorded a huge foreign exchange loss amid naira depreciation against the markets
- The FX losses were by telecommunication companies, industrial goods and also consumer goods
- The value of the naira has struggled against other foreign currencies in official and unofficial markets
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
MTN Nigeria Communications Plc and six other prominent companies collectively incurred staggering foreign exchange losses amounting to N2.06 trillion in 2024.
This marks a significant 28.9% increase from the N1.6 trillion recorded in 2023.
Source: Getty Images
The huge losses once again highlight the severe strain imposed by the naira's continuous depreciation against other foreign currencies.
By the end of 2024, the naira had plummeted to N1,535 per dollar, a stark contrast to N907.1 per dollar at the close of 2023, representing a 69% depreciation.
This drastic depreciation sent shockwaves through corporate balance sheets as foreign exchange liabilities surged when converted into local currency, Leadership reports.
Nigerian companies' FX losses
Among the hardest hit companies were Nestlé Nigeria Plc, Dangote Cement Plc, Lafarge Africa Plc, BUA Cement Plc, Nigerian Breweries Plc, and Dangote Sugar Refinery Plc.
MTN Nigeria led the pack in FX losses, reporting a staggering N2 trillion over the past two years due to naira devaluation and macroeconomic volatility.
In 2024 alone, despite a 36.1% revenue surge to N3.36 trillion driven by increased data and voice earnings, MTN posted a net loss of N400.44 billion, significantly worse than the N137.02 billion loss in 2023.
The telecom giant attributed this to persistent naira depreciation (-41% year-on-year) and sharply rising finance costs (+82.2% year-on-year), exacerbated by Nigeria’s high interest rate environment (MPR: 27.5%).
MTN’s net foreign exchange losses soared by 25% to N925.36 billion in 2024, reflecting the brutal impact of currency depreciation alongside surging lease expenses (+92.8% year-on-year) and higher energy costs (+43.4%).
Despite these challenges, MTN recorded a net profit of N114.49 billion in Q4’24, a turnaround from the N122.03 billion loss in Q4’23, driven by cost optimisations, including renegotiated lease agreements with IHS and reduced net FX losses (-92.3% year-on-year).
There are expectations that MTN could return to sustained profitability in 2025 following a recent 50% tariff hike.
Source: Getty Images
Other companies affected
Dangote Cement and Dangote Sugar Refinery collectively recorded N458.23 billion in FX losses in 2024, a 36.3% increase from 2023.
Dangote Cement reported N249.3 billion in FX losses, up 52% from 2023, while Dangote Sugar Refinery incurred N208.2 billion in losses, a 21.3% rise from the previous year.
Nestlé Nigeria and Nigerian Breweries also faced substantial losses.
Nestlé reported FX losses of N290.7 billion, contributing to a pre-tax loss of N221.6 billion, more than double the loss in 2023.
Nigerian Breweries posted FX losses of N157.59 billion, pushing pre-tax losses to N182.92 billion compared to N145.22 billion in 2023.
Naira depreciates further against US dollar
Legit.ng previously reported that the naira has lost more value against the US dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM).
According to data from the Central Bank of Nigeria, at the end of trading at the Nigerian Foreign Exchange Market (NFEM), the naira fell to 1,535.73/$1 on Tuesday, March 11.
It was the same outcome for the naira against the British pound sterling and also the euro in the official market.
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Proofreading by Nkem Ikeke, copy editor at Legit.ng.
Source: Legit.ng
Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.
Nkem Ikeke (Copy editor) Nkem Ikeke is currently a copy editor who also writes for the politics and current affairs desk on weekends. She holds a Bachelor of Arts in Mass Communication degree from the University of Nigeria, Nsukka (2010), and has over 10 years of work experience in the media industry (Reporter, News Agency of Nigeria). Email: n.ikeke@corp.legit.ng
