Telecommunications giant Airtel Africa Plc reported foreign exchange loss of $549 million that contributing to an overall loss after tax of $89 million for its full fiscal year ending March 2024.

The telecom company’s latest financial report, released on Thursday, highlighted the significant impact of currency devaluations on its bottom line.

The devaluations of both the naira in June 2024 and the Malawian kwacha in November 2023 resulted in substantial forex losses, exacerbating the financial challenges faced by the company.

The $89 million loss after tax was primarily attributed to the $549 million net of tax impact of exceptional derivative and foreign exchange losses.

This setback underscores the vulnerability of companies operating in economies with volatile currency markets.

Despite the forex challenges, Airtel Africa’s reported revenue decline by 5.3 percent to $4.98 billion. The depreciation of the naira played a significant role in this decline.

However, the company noted that its revenue in constant currency actually grew by 20.9 percent, with fourth-quarter growth accelerating to 23.1 percent.

Airtel Africa emphasized that Nigerian constant currency revenue growth saw a notable acceleration to 34.2 percent in the fourth quarter of the fiscal year, despite the challenging economic backdrop marked by currency fluctuations.

The telecommunications sector, like many others, is sensitive to currency devaluations, as it impacts the cost of imported equipment, infrastructure, and services.

Airtel Africa’s experience underscores the importance for multinational corporations to navigate and mitigate currency risks effectively in markets prone to volatility.

As Nigeria and other countries grapple with economic uncertainties and currency fluctuations, companies operating within these environments must employ robust risk management strategies to safeguard against potential forex losses and maintain financial stability.

The Nigerian Electricity Regulatory Commission (NERC) has given the green light for the upgrade of 60 additional feeders for the Eko Electricity Distribution Company (EKEDC), bringing the total number of upgraded feeders to 134.

This decision follows a comprehensive review by NERC of the capacity of the existing feeders to ensure that customers classified under each feeder receive a minimum of 20 hours of power supply daily.

The upgrade is expected to significantly enhance power distribution across the areas covered by the EKEDC network.

Babatunde Lasaki, the spokesperson for EKEDC, expressed optimism about the impact of the feeder upgrade on service delivery.

He noted that the additional feeders, which include a diverse range of locations such as commercial areas, residential neighborhoods, and industrial zones, will contribute to improving the overall power supply experience for customers.

Lasaki listed some of the feeders scheduled for upgrade, including prominent areas like Agbara, Apapa, Amuwo-Odofin, Lekki, and Idi Araba.

These areas are known for their high electricity demand, and the upgrade is expected to address issues related to power availability and reliability.

“We are committed to meeting the needs of our customers by providing them with reliable and uninterrupted power supply,” Lasaki stated.

“The approval from NERC to upgrade these additional feeders is a testament to our dedication to improving service delivery and customer satisfaction.”

The upgrade of the feeders is part of EKEDC’s ongoing efforts to leverage technology and enhance operational efficiency in the distribution of electricity.

The company aims to leverage modern infrastructure and innovative solutions to address challenges such as power outages, voltage fluctuations, and equipment failures.

Lasaki also highlighted EKEDC’s commitment to maintaining a customer-centric approach in its operations.

He reassured customers that the company would continue to prioritize their needs and strive to exceed their expectations in terms of service quality and reliability.

Meanwhile, the reduction in tariffs announced by NERC is expected to provide some relief to customers in Band A areas, including those covered by EKEDC.

This adjustment reflects changes in factors such as foreign exchange rates, inflation, and generation costs, and is aimed at ensuring fair and reasonable pricing for electricity.

In a bid to secure a $750 million loan from the World Bank, Nigeria is considering the reintroduction of previously suspended telecom taxes and other fiscal measures.

This potential move comes as part of the Stakeholder Engagement Plan for Nigeria – Accelerating Resource Mobilisation Reforms program between the country and the World Bank.

The program, aimed at strengthening the government’s financial position by enhancing its capacity to manage and mobilize domestic resources effectively, outlines plans to improve tax and customs compliance and safeguard oil revenues.

Among the proposed measures are the reintroduction of excises on telecom services and the EMT levy on electronic money transfers through the Nigerian Banking System.

President Bola Tinubu had previously ordered the suspension of the five percent excise duty on telecommunications and the Import Tax Adjustment levy on certain vehicles in July 2023.

However, negotiations between the government and the World Bank suggest that this suspension may be lifted to meet the targets of the new loan program.

The World Bank’s contribution of $750 million constitutes a significant portion of the program’s budget, with the government expected to contribute $1.17 billion through annual budgetary allocations.

The proposed tax reforms under the ARMOR program are expected to have far-reaching implications across various economic sectors.

Stakeholders that would be affected by these measures include telecom and banking service providers, manufacturers of goods such as alcoholic beverages, tobacco products, and sugar-sweetened beverages, as well as the general tax-paying public, importers, and international traders.

Key industry groups, such as the Association of Licensed Telecom Operators of Nigeria, are being engaged regarding the excise duties on telecom services.

The planned reintroduction of these taxes is part of a larger governmental initiative aimed at reforming tax and excise regimes, enhancing the administrative capabilities of tax and customs, and ensuring transparency in oil and gas revenue management from 2024 to 2028.

The program also emphasizes the importance of engaging vulnerable groups to mitigate any disproportionate impact of these changes.

Additionally, the program outlines specific allocations for technical assistance, including investments in better data sharing systems, risk-based audits, compliance processes, and capacity building for institutions such as the Federal Inland Revenue Service and the Nigeria Customs Service.

While the reintroduction of telecom taxes and other levies may face resistance from some stakeholders, the government sees them as essential steps toward achieving its fiscal targets and unlocking much-needed financing for development projects.

As negotiations with the World Bank continue, Nigeria must balance its revenue needs with the potential impact on businesses and consumers.