Businesses in Nigeria, Africa’s largest economy, have begun cutting down on their dollar exposure to better manage risk and profitability following the persistent depreciation of the Nigerian Naira since President Bola Ahmed Tinubu took office.

The Nigerian Naira lost over 8% on Wednesday to close at N1,699 against the US dollar, according to FMDQ data obtained by Investors King.

Analysts are now projecting a further decline to N1,700-N1,800 per dollar for the local currency by the end of the fourth quarter.

This negative outlook is prompting businesses with dollar debt to reduce their exposure to better manage financial obligations, especially amid rising borrowing costs in naira.

“One is still seeing volatility in the naira, so there’s still limited confidence in the currency,” said Muyiwa Oni, an analyst at Stanbic IBTC Bank Plc. “The biggest point is that as an institution, you can’t control naira movement, but you can mitigate your risks.”

Last month, Nigerian Breweries announced plans to pay off a $197 million foreign debt to rein in interest expenses and other costs.

Similarly, Ecobank Nigeria stated it was working on converting a $200 million dollar loan to naira to reduce its risk exposure after reporting a 77% decline in pre-tax profit due to naira devaluation.

In July, MTN Nigeria also revealed it had reduced its letters of credit obligations to $100 million from $417 million in December.

The ongoing naira woes have already prompted multinationals, including Unilever Plc, Procter & Gamble Co., GSK Plc, Sanofi SA, and Diageo Plc, to either reduce their Nigerian exposure or exit the market completely by selling to local firms.

As part of its mandate of supporting medium, small, and micro-enterprises to grow, the Bank of Industry said it disbursed loans totalling N77.65bn to about 1,000 MSMEs across the country within the first nine months of 2024.

Addressing dignitaries who attended the 2024 BOI Annual Public Lecture Series held on Wednesday in Abuja, BOI Managing Director and Chief Executive Officer, Dr Olasupo Olusi, explained that the financial assistance would enable the beneficiaries to enhance their operations, improve their productivity and contribute to the overall economic growth of the country.

Welcoming participants at the event themed, ‘Creating Impact: The Role of MSME Support and Financing in alleviating poverty and food insecurity in Nigeria’, Olusi stated that the loan disbursement is part of the government’s strategy to address significant challenges such as limited access to finance, difficult operating environment, and infrastructure deficiencies.

He also emphasised that the disbursement of the loans to the business owners is crucial for alleviating poverty and ensuring food security in Nigeria.

Describing MSMEs as the bedrock of any thriving economy, the BOI boss disclosed that MSMEs make up approximately 97 percent of all businesses contributing to over 80 percent of employment and about 50 percent of GDP, adding that they are the driving force of food production and the overall economic development of the country.

He identified some of the challenges facing small business owners such as limited access to finance, challenging operating environments, and infrastructure deficiencies, emphasising that addressing these issues is essential to alleviating poverty and ensuring food security.

Olusi stressed that through sufficient financial support and an enabling environment, MSMEs are better equipped to improve the socio-economic conditions of the poor by creating employment opportunities, promoting the utilization of local raw materials, and driving economic growth.

He said some of the beneficiaries of the loan facility “range from the local palm kernel oil processor in the east to the woman with a printing press in the north and a local furniture maker in the south, amongst others.”

According to him, the bank will continue to create an environment that promotes sustainable growth by providing access to capacity-building programs, encouraging technological innovation, and facilitating connections between businesses and both domestic and international markets.

To deepen the bank’s impact, he said it has prioritized six key thematic areas including MSMEs, Digital Economy, Youth & Skills, Climate and Sustainability, Infrastructure, and Gender, adding that the approach ensures that every loan disbursed helps to create jobs, achieves a greener economy, and boosts overall economic growth and development.

The Minister of Industry, Trade and Investment, Doris Anite, while making her remarks said that the government is focused on incorporating MSMEs into its initiatives aimed at reducing food insecurity and enhancing the production of essential goods and services, including food.

For the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, the government is working to increase the equity base of the bank.

Represented by the Managing Director of the Ministry of Finance Incorporated, Armstrong Takang, Edun stated that this increase in equity will enable the bank to better mobilize resources and focus more on supporting MSMEs.

The Nigerian National Petroleum Company Limited (NNPCL) has again disappointed Nigerians over the functionality of the country’s refinery in Port-Harcourt, Rivers State.

The Group Chief Executive Officer of the NNPC, Mele Kyari, had in July, this year, stated categorically that the refinery would come into operation in early August.

Kyari’s announcement made it the seventh time the petroleum company would promise Nigerians that the Port-Harcourt Refinery would restart operations.

But the company has not been able to fulfill any of its assurances as at the time of this report, even as the challenges of fuel availability facing Nigeria bite harder.

The NNPC CEO had earlier promised that the refineries would be functional before the end of former president Muhammadu Buhari’s administration in May 2023.

The most recent date was promised by the Chief Financial Officer of the NNPC, Umar Ajiya, who said the Port Harcourt refinery would commence operations in September 2024.

In a recent reply to an enquiry by legal luminary, Femi Falana, SAN, it was noted that the contractor overseeing the rehabilitation of the Port Harcourt refinery, said it would provide details on the project’s completion by or before October 2.

The contractor conveyed this through a law firm, Olajide Oyewole LLP, in response to a letter from a Senior Advocate of Nigeria, Femi Falana, who had inquired about the completion timeline for the refinery’s rehabilitation.

Falana had written to them on September 17 and 24, respectively regarding the contract with the NNPC.

Kyari had informed the Senate recently when he appeared before the red chamber that Nigeria would be a net exporter of petroleum products by the end of the year.

He had informed the lawmakers that it was impossible to have the Kaduna refinery come into operation before December and that it would get to December. He had said similar things of both Warri and Kaduna Refineries.

According to him, Port Harcourt would commence production in early August this year.