MTN Nigeria Communications Plc and Airtel Africa have aggressively cut their foreign debt, repaying $1.2 billion in 2024 to ease foreign exchange burden as they chart a path back to profitability.
Following the naira’s steep depreciation in 2023, both telcos suffered $1.56 billion in foreign exchange losses.
The Central Bank of Nigeria (CBN)’s unification of the country’s foreign exchange market in June 2023 triggered a sharp devaluation of the naira to 471/$ from 1043.09/$ by December 28, 2023, and 1512.3/$ by March 7, 2025.
MTN Nigeria declared its first loss after tax of N137 billion since its 2019 listing on the Nigerian Stock Exchange in 2023. Airtel Africa, which had 50.9 million subscribers in Nigeria as of March 2024, reported a loss after tax of $89 million for its full year ended March 2024, primarily due to FX headwinds in Nigeria and Malawi.
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To mitigate further FX-induced losses, MTN and Airtel have aggressively cut FX liabilities. MTN Nigeria slashed its outstanding letters of credit (LC) dollar obligations from $416.6 million as of 31 December 2023 to $20.8 million by the end of 2024.
Airtel Africa, on its part, repaid $739 million in foreign currency debt over the last year, reducing its foreign currency debt exposure. Both companies believe that reducing their foreign currency obligations is key to strengthening their financial positions.
