Nigeria’s most prominent companies are bearing the brunt of the country’s forex reforms. Data from their latest earnings reports show profit drops and, in some cases, losses due to the policy.

In June, the Central Bank of Nigeria announced that it had abandoned its years-long currency peg, allowing the naira to trade freely. The apex bank aimed to end Nigeria’s forex worries with this move. Before the announcement, Nigeria had been struggling with an acute dollar scarcity due to low oil revenues and imports. Also, foreign investments, one of Nigeria’s chief forex sources, declined to a six-year low in 2022. The decision to float the naira was an attempt to lure back these investors.

However, this decision is already constraining businesses, including Nigeria’s top companies. Dangote Cement Plc, Nigeria’s largest firm, posted a 14% decline in pre-tax profits to ₦93 billion in its second-quarter earnings report. The company reported an exchange rate loss of ₦103.8 billion because of Nigeria’s new forex regime.

The Nigerian arm of Guinness suffered the same fate. In its full-year results for the period ending June 2023, the company posted ₦49 billion in exchange rate losses. This led Guinness to a loss of ₦18.1 billion, its first full-year loss since 2020. In the same vein, Nigeria Breweries Plc declared an exchange rate loss of N70.6 billion in its second-quarter earnings report.

MTN Nigeria, the country’s largest telecommunications company, also posted a drop in its H1 result in 2023. MTN reported a 29.14% decline in its profit for the period under review of ₦128 billion, compared to ₦181 billion during the same period in 2022. In its report, which it published on the Nigerian Exchange, MTN’s CEO, Karl Toriola, cited Nigeria’s “swift reforms” to remove fuel subsidies and float the exchange rates as triggers for this profit decline.

Similarly, Airtel Africa reported a post-tax loss of $151 million in its quarterly report for April to June 2023. In the same period in 2022, the company made $178 million in profit after tax. Airtel Africa’s CEO, Olusegun Ogunsanya, said in the report that the telco improved in voice, data, and mobile money, but foreign exchange headwinds impacted these gains.

Nestle Nigeria also reported a pre-tax loss of N86.5 billion in the second quarter of the year. This loss contributed to the shedding of its profits from the previous quarter. As a result, the company’s half-year gains stood at N61.6 billion, one of its worst performances in years. Nestle’s losses were primarily due to a forex loss of N123.7 billion.


Last weekend, the Economic Intelligence Unit (EIU) predicted that the CBN would revert to “heavier management of the exchange rate in late 2023 to tame rapid price rises.” Two major reasons guided this prediction: inflation is climbing too fast, and a liquidity shortage is causing arbitrages as high as N100 to appear at the Investors’ and Exporters’ Window.

The primary aim of the policy is to attract investors back to the Nigerian market. But as we’ve explained before, it’s not as simple as a wand wave. Investors have more than one reason to worry. However, if Nigeria’s new forex policy doesn’t achieve this aim, then the EIU’s prediction might hold. What’s left is to see whether Nigeria’s economy can hold on for long enough before the desired capital inflows show up.

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