Airtel Africa says reform of Nigerian FX market expected to bolster US dollar liquidity
Airtel Africa
95.00p
15:44 15/11/24
Airtel Africa said that the Nigerian central bank's decision to unify all segments of the country's foreign exchange market was expected to bolster dollar liquidity and engender a more stable market.
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Nigeria was the telecommunications and mobile banking services outfit's largest market.
The underpenetrated market, population growth and strong demand for digital and financial services had seen revenues and operating profits rise at compound annual rates of growth of 23.9% and 29.5% over the past five years, respectively.
A previously published sensitivity analysis released by Airtel estimated that after 12 months a 1% drop in the Nigerian naira's value would result in a $22m drag on revenues, a $12m reduction in earnings before interest, taxes, depreciation and amortisation and $7m decline in finance costs excluding derivatives.
On 14 June, the Nigerian central bank had collapsed all segments of the FX market into the Investors and Exporters window and reintroduced the 'Willing Buyer, Willing Seller' model at that window.
The result had been an appreciation of the Greenback versus the Nigerian naira.
As of 0858 BST, shares of Airtel Africa were declining by 0.89% to 122.40p.