Multinational Companies Exiting Nigeria Due to Currency Challenges

News of multinational companies exiting Nigeria has become the harsh reality for a country blessed with both human and natural resources. The scenario is not different for small and medium-sized businesses. The value of the Naira has taken a slow but steady depreciation trend against major international currencies. Planning becomes difficult and even chances of hedging against currency risks become futile efforts.

The scarcity of foreign exchange might not have been much of a problem if our upstream suppliers were within the country. On the contrary, we as a country heavily rely on imports (raw materials, semi-finished and finished products). This makes companies cave under the burden of increased operational costs due to exchange rate inconsistencies. For multinational companies, fund repatriation challenges do not also yield encouraging proceeds. The second reason is operational complexities

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Nigeria’s forex crisis adds MTN to growing list of financially distressed companies“Most of the naira weakness will affect 2024, more than 2023, and it will take some timefor MTN to recoup cost pressure from the consumer given regulatory restrictions in Nigeria,”Bloomberg quoted Peter Takaendesa, head of equities at Cape Town-based MergenceInvestment Managers, as saying.
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