Naira Devaluation Hits Hard: MTN, Nestlé, Dangote Cement Lose Over N2 Trillion!
Naira Devaluation, Foreign Exchange Losses, Nigerian Economy
The devaluation of the Naira in 2024 has inflicted massive financial losses on some of Nigeria’s biggest companies, with MTN, Nestlé, Dangote Cement, and others recording a staggering N2.06 trillion in foreign exchange (FX) losses.
Major industries—including manufacturing, telecommunications, and FMCG—are feeling the heat, as rising foreign debt servicing costs eat into their revenues and erode profitability.
Biggest FX Losses in 2024: Who Got Hit the Hardest?
Several industry giants have reported record-breaking losses, with some companies witnessing over 50% increases in FX losses compared to 2023:
- Dangote Cement: N249.3 billion FX loss (+52% from 2023)
- Dangote Sugar: N208.2 billion FX loss (+21.3% from 2023)
- Nestlé Nigeria: N290.7 billion FX loss
- Nigerian Breweries: N157.59 billion FX loss
These currency-related losses have pushed some companies deep into the red, with their bottom lines worsening significantly:
- Nestlé Nigeria reported a N221.6 billion loss before tax in 2024, compared to N104.03 billion in 2023.
- Nigerian Breweries declared a N182.92 billion loss before tax, up from N145.22 billion the previous year.
What’s Behind These Massive Losses?
According to Wassim Elhusseini, CEO of Nestlé Nigeria, the losses are largely due to the unprecedented devaluation of the Naira, which has driven up finance costs on foreign currency obligations.
Financial analysts explain that businesses with large foreign currency debts are under intense financial strain, as the weakening Naira forces them to spend more revenue on loan repayments, leading to declining profits and heightened default risks.
Experts Weigh In:What This Means for Nigeria’s Economy
- David Adnori, Vice President at Highcap Securities Limited, warns that companies with foreign currency exposure are now struggling to stay afloat as debt servicing costs consume a larger portion of their revenues.
- Ambrose Omordion, COO of InvestData Consulting Limited, adds that currency instability is discouraging investors, with both local and foreign stakeholders adopting a “wait-and-see” approach before making further financial commitments.
Ripple Effects: What This Means for Shareholders & Jobs Dividends at Risk:
With many firms unable to offset their FX losses, shareholders may receive lower returns—or none at all. Potential Job Cuts: To stay afloat, companies may be forced to freeze hiring or reduce their workforce, affecting employment levels across multiple sectors. What’s Next? Can Nigerian Businesses Survive the Crisis?
With economic uncertainty deepening, businesses are scrambling for survival. The big question now is: Will the government step in with policy solutions, or will more companies sink under the pressure?
As the FX crisis unfolds, all eyes are on Nigeria’s corporate sector to see how it navigates this turbulent economic landscape. Stay tuned for further updates.
