Airtel Africa Plc has said that the latest policy measure by the Central Bank of Nigeria (CBN) unifying the exchange rates at the parallel and the official markets will help in alleviating the challenges faced by businesses in the last few years to access foreign currencies.
The telecom company made this in a Notice signed by the Group Company Secretary, Simon O’Hara, to the Nigerian Exchange Limited (NGX).
It stated: “Airtel Africa notes that the Central Bank of Nigeria (CBN) has announced changes to the operations in the Nigerian Foreign Exchange (FX) Market, including the abolishment of segmentation, with all segments now collapsing into the Investors and Exporters (I&E) window and the reintroduction of the ‘Willing Buyer, Willing Seller’ model at the I&E window.
“As a result of the CBN decision, the US dollar has appreciated against the naira in the I&E window. Airtel Africa welcomes these changes as a positive move towards a more stable Nigerian FX market,” the telco added.
Airtel Africa, one of the leading mobile network operator (MNO) in the continent with strong presence in the country, recalled that a currency devaluation sensitivity analysis in its recent results for the financial year 2022/23, indicated that a 1% devaluation in the Naira would have a negative impact of $22 million on revenues, $12 million on EBITDA and $7 million on finance costs (excluding derivatives) on a 12- month basis.
This is even as it stated that in addition, the direct impact of 1% devaluation in the Nigerian Naira on derivative instruments held by the Group would have a negative impact of approximately $1.5 million.
The telco clarified that a weighted average exchange rate used in the profit and loss statement for the 12 months ended 31 March 2023 was approximately 440 NGN/USD, and the rate used to prepare the balance sheet as of 31 March 2023 was 461.4 NGN/USD while its USD component of operating costs within the Nigerian business is minimal and, therefore, we do not anticipate a material impact on the EBITDA margin.
While noting that Airtel Nigeria is its largest market, with significant growth potential driven by an under-penetrated market, population growth, and strong demand for digital and financial services, the company stated that in its recently reported results for the financial year 2022/23, the customer base in the country increased by 9%, with 4G data customers increasing by 27.6% which combined with continued ARPU expansion drove Nigerian constant currency growth of 20.3% in revenues and 11.1% in EBITDA.
It maintained that the Group continued to invest in Nigeria to enable it to capture this growth opportunity, drive continued digitalization across the country, facilitate economic progress, and transform lives across Nigeria.
