Emmanuel OchayiIn a blow to major corporations, the decline in the naira’s value has led eight Nigerian firms to declare N918.1 billion in currency revaluation losses. The naira’s slide, exacerbated by the market-driven valuation initiated by the Central Bank of Nigeria, has sent shockwaves through the business landscape.
In the wake of the naira’s tumultuous fall, a chorus of financial statements from companies including Dangote Sugar, Dangote Cement, Nestle Nigeria, Nigerian Breweries, Guinness Nigeria, MTN Nigeria, Airtel Africa, MRS Oil, and Seplat Energy tells a tale of losses, triggered by the steep devaluation of the local currency.
Economic experts weren’t surprised by these losses, attributing them to the prevalent economic challenges faced by businesses in 2023. The firms, laden with foreign loans and obligations, found themselves severely impacted by the devaluation’s financial ramifications.
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Commenting on the issue, a financial expert mentioned, “The forex loss was anticipated given the economic headwinds these businesses had to confront this year.”
The situation is dire for some, as highlighted by MTN Nigeria’s struggle to secure foreign exchange for their capital expenditure needs. “Forex paucity has limited our ability to fulfill our investment requirements,” expressed an MTN spokesperson.
Similarly, Airtel Africa’s financial report emphasized the scarcity of foreign currency within local monetary systems, causing hurdles in meeting international payment obligations. “Instances of a limited supply of foreign currency have constrained our cash utilization and payment schedules,” the company revealed.
The implications are substantial, with companies like Dangote Sugar facing a revaluation loss of N90.99 billion, while Dangote Cement recorded N99.02 billion and Nestle’s loss tallied N143.4 billion.
The narrative reflects a broader concern as the World Bank identifies the naira as one of the weakest-performing currencies in Africa, shedding nearly 40% of its value since June. This decline has impacted various sectors, leading to substantial revaluation losses for these major corporations.
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