In a financial rollercoaster ride, eight prominent Nigerian companies, including Dangote Cement, MTN Nigeria, and Nestle, collectively reported a revaluation loss of N918.1 billion due to the naira’s dramatic 68.55% decline against the dollar by the end of September 2023.
The Central Bank’s decision in June to let market forces determine the naira’s value saw it tumble from 461/$1 in December 2022 to 777/$1 in September 2023.
Dangote Sugar Refinery recorded a loss of N90.99 billion, citing the World Bank’s label of the naira as one of Africa’s worst-performing currencies.
Dangote Cement and Nestle also faced substantial revaluation losses of N99.02 billion and N143.4 billion, respectively.
Other affected companies include Nigerian Breweries, MTN Nigeria, MRS Oil, Seplat Energy, Airtel Africa, and Guinness Nigeria.
For companies like MTN Nigeria and Airtel Africa, the foreign exchange losses extend beyond the balance sheet.
MTN Nigeria, which reported a forex loss of N232.8 billion, acknowledged challenges in securing foreign exchange for its capital expenditure needs.
Similarly, Airtel Africa reported a foreign exchange loss after tax of $317 million (N246.31 billion), citing limited foreign currency supply within the local monetary system as a significant hindrance.
Analysts attribute these losses to foreign loans or obligations held by the companies with the naira’s devaluation significantly impacting their financial standings.
Experts noted that such losses were anticipated given the economic challenges businesses grappled with in 2023, emphasizing the impact on firms with foreign commitments or loans.
The tumultuous foreign exchange landscape and challenges in meeting foreign obligations have become recurring themes, reflecting the broader economic uncertainties of the year.