MTN Nigeria Communications Plc and Airtel Africa have significantly reduced their foreign debt, repaying a total of $1.2 billion in 2024.
This move aims to ease the burden of foreign exchange volatility and support their return to profitability.
After the naira’s sharp depreciation in 2023, MTN Nigeria and Airtel Africa recorded $1.56 billion in foreign exchange losses.
The Central Bank of Nigeria’s forex unification policy in June 2023 led to a steep devaluation of the naira, dropping from ₦471/$ to ₦1,043.09/$ by December 28, 2023, and further to ₦1,512.3/$ by March 7, 2025.
MTN Nigeria reported its first post-listing loss of ₦137 billion in 2023, marking its first negative result since its 2019 debut on the Nigerian Stock Exchange.
Airtel Africa, with 50.9 million Nigerian subscribers as of March 2024, posted a $89 million loss after tax for its full year ended March 2024, mainly due to foreign exchange challenges in Nigeria and Malawi.
To reduce further FX-induced losses, MTN Nigeria and Airtel Africa have aggressively cut their foreign currency liabilities.
MTN Nigeria, in particular, reduced its outstanding letters of credit dollar obligations from $416.6 million as of December 31, 2023, to just $20.8 million by the end of 2024.
Meanwhile, Airtel Africa repaid $739 million in foreign currency debt over the past year, significantly lowering its FX debt exposure.
Both MTN Nigeria and Airtel Africa see reducing foreign currency obligations as crucial to strengthening their financial positions and mitigating further FX risks.
At the end of 2023, the then-chief executive officer of Airtel Africa,
Olusegun Ogunsanya, stated, “We will continue to focus on reducing our exposure to currency volatility.”
“However, we took some comfort from the improvement in US dollar liquidity in the foreign exchange market and reduced volatility over the course of the year, as the naira exchange rate held relatively stable through H2 2024,” MTN said in its 2024 results.
However, the debt reduction came at a cost, significantly impacting MTN Nigeria’s financials.
Despite posting a record revenue of ₦3.36 trillion in 2024, the company recorded a ₦400.44 billion loss after tax, driven by forex losses from the revaluation of its foreign currency-denominated obligations.
MTN Nigeria stated that without the net forex loss, it would have reported a ₦247.3 billion profit after tax.
Meanwhile, Airtel Africa saw its revenue decline by 5.78% to $3.64 billion from $3.86 billion in the nine months ending December 2024. However, its profit after tax surged 12,300% to $248 million, up from just $2 million.
