Naira Dollar Exchange Rate: MTN Suffered ₦925.4 Billion Foreign Exchange Loss in 2024

In its recently released 2024 full-year earnings, MTN Nigeria Communications Plc reported a staggering ₦925.4 billion in foreign exchange losses, a sharp escalation from ₦81 billion recorded in 2022 and ₦740 billion in 2023. This currency hit became the single biggest factor driving the company’s shift to a ₦135.7 billion loss after tax, despite strong service revenue growth of 35.9% to ₦3.34 trillion.

The results paint a stark picture of how exchange rate volatility in Nigeria has become a major operational and financial risk for businesses with foreign currency exposure. For MTN, a company reliant on imported network equipment, technology services, and foreign debt, the sudden depreciation of the naira in 2024 dealt a blow that even double-digit revenue growth could not cushion.

From Dual Rates to Free Float

MTN’s forex challenge is rooted in Nigeria’s shifting currency management policies. In June 2023, the Central Bank of Nigeria (CBN) moved to a managed float system, abandoning the heavily controlled exchange rate regime that had kept the official naira rate artificially low for years. The move was intended to attract foreign investment and unify Nigeria’s multiple exchange rates—a key demand from international lenders and investors.

However, the transition was anything but smooth. The naira immediately plunged, and by 2024, it had lost over 100% of its value against the dollar. Import-dependent companies like MTN, which purchase network infrastructure, software licenses, and technology services in dollars, saw their cost base balloon overnight. The currency swing also raised the naira value of MTN’s existing foreign currency loans, further inflating finance costs.

MTN’s Dual Vulnerability

For MTN Nigeria, the exchange rate hit came from two directions. First, operating expenses linked to imports ranging from equipment for 5G rollout to software subscriptions and maintenance contracts became dramatically more expensive when converted to naira.

Second, foreign-denominated debt became a far heavier burden in local currency terms. MTN Nigeria’s debt profile includes foreign loans used to finance its aggressive capital expenditure programme, particularly the expansion of 4G coverage and rollout of 5G services. When the naira weakened, the company had to restate those dollar liabilities at much higher naira equivalents, creating a massive paper loss that hit its profit and loss statement directly.

Inflation Spiral and Consumer Pressure

The exchange rate story didn’t stop at MTN’s balance sheet, it rippled into consumer demand and operational costs. Nigeria’s currency troubles have driven imported inflation, making basic services and equipment costlier. MTN had to contend with rising energy costs, including diesel for powering base stations, which is priced in dollars.

At the same time, Nigerian consumers many of whom earn in naira while dealing with rising living costs—faced shrinking disposable income. This squeezed demand for non-essential telecom services like premium data bundles and value-added services.

Repricing Services: The Role of the Tariff Hike

The Nigerian Communications Commission (NCC) recently approved a 50% increase in telecom tariffs, partially acknowledging the cost pressures operators face due to currency depreciation. While MTN and its peers had lobbied for the adjustment for months, regulatory hesitation delayed relief until 2025. The tariff hike, while offering some offset against forex-driven cost increases, comes with its own risks. Higher prices could dampen demand, especially among lower-income subscribers. For MTN, the challenge will be to strike a delicate balance between protecting profitability and maintaining subscriber growth.

2025 Outlook: Will Currency Stability Return?

Looking ahead, MTN’s performance in 2025 will heavily depend on whether the naira stabilizes. The government’s ability to attract fresh dollar inflows, either through increased oil revenues, foreign investment, or external borrowing, will be critical. Any return to CBN intervention to support the currency could offer relief, but at the cost of reintroducing distortions into the forex market.

For now, MTN Nigeria’s story is a cautionary tale for corporate Nigeria: in a volatile currency environment, even market leaders with strong revenue growth and dominant market positions are vulnerable. As MTN navigates 2025 with higher tariffs, rising digital demand, and ongoing naira uncertainty, forex management will remain a strategic priority.

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