By SpringsNewsNG Media Limited | March 10, 2025

MTN Nigeria Communications Plc and Airtel Africa have aggressively reduced their foreign currency liabilities, repaying $1.2 billion in 2024 to mitigate the impact of foreign exchange (FX) losses and restore financial stability.

Struggles with FX Losses

The steep depreciation of the naira in 2023 caused both telcos to suffer a combined $1.56 billion in FX losses. Following the Central Bank of Nigeria (CBN)’s foreign exchange unification policy in June 2023, the naira devalued sharply from ₦471/$ to ₦1,043/$ by December 2023 and further to ₦1,512.3/$ by March 2025.

As a result, MTN Nigeria posted its first-everMTN Nigeria loss after tax of ₦137 billion in 2023 despite strong revenue growth. Similarly, Airtel Africa recorded a loss of $89 million due to FX-related challenges in Nigeria and Malawi.

Debt Reduction Strategy

To counter FX volatility, both companies have aggressively repaid foreign currency debts:

• MTN Nigeria slashed its outstanding letters of credit (LC) obligations from $416.6 million in December 2023 to just $20.8 million by the end of 2024.
• Airtel Africa repaid $739 million in foreign currency debt in 2024, significantly reducing its exposure to exchange rate fluctuations.

Olusegun Ogunsanya, Airtel Africa’s former CEO, emphasized their focus on reducing exposure to currency risks, even at the cost of realizing short-term FX losses.

Financial Impact

Despite these efforts, MTN Nigeria still recorded a ₦400.44 billion loss after tax in 2024, primarily due to forex revaluations. The company noted that without FX losses, it would have reported a ₦247.3 billion profit.

Airtel Africa, despite a 5.78% decline in revenue to $3.64 billion, saw a remarkable 12,300% increase in profit after tax to $248 million—a major turnaround from its $2 million profit a year prior.

Shifting to Local Debt

Both telcos are moving away from FX-denominated debt:

• Airtel Africa now holds 92% of its debt in local currency, up from 79% in 2023.
• MTN Nigeria increased its naira-denominated loans to 72%, reducing its dollar exposure from 44% in 2023 to 28% in 2024.

To finance operations, MTN raised ₦190 billion under its ₦250 billion Commercial Paper Issuance Programme. CFO Modupe Kadri revealed that MTN’s FX exposure dropped from $1 billion in December 2023 to $300 million by the end of 2024.

Renegotiating Tower Leases and Cutting Costs

Beyond debt restructuring, telcos renegotiated contracts with infrastructure companies such as IHS, INT Towers Limited, and ATC Nigeria, leading to significant cost savings. MTN’s new lease agreement with IHS alone saved the company ₦113.8 billion in operational expenses.

MTN CEO Karl Toriola emphasized that cost-cutting measures and localization efforts would reduce FX exposure, improve financial resilience, and restore profitability.

Regulatory Boost and Future Outlook

With regulatory approval for a 50% increase in telecom tariffs, industry analysts believe that combined with ongoing debt reduction efforts, this will put the sector on a path to sustainable profitability.