Manufacturers’ Forex Losses Rise 566% to N792bn in 2023


Manufacturers’ Forex Losses Rise 566% to N792bn in 2023

A review of the performance of  multinational corporations and big indigenous firms operating in the country for the financial year ended December 2023 have shown that they recorded a combined Foreign Exchange, forex, losses of N792 billion due to naira depreciation caused by the monetary policy reform.

However, there seems to be respite for manufacturers as the Central Bank of Nigeria, CBN’s intervention in the foreign exchange may have started yielding fruits with the naira scaling up gradually.

Though, its sustenance is still not guaranteed as analysts move for a robust fiscal policies to complement the monetary policies aimed  at strengthening the naira.

Trading at the Nigeria Autonomous Foreign Exchange, NAFEX showed that the naira gained following last week Wednesday’s disbursement of $1.5 billion by the CBN to settle outstanding obligations owed to commercial bank customers.

During mid-day trading on Friday, according to FMDQ Nigeria’s naira appreciated to N1,301.00 per dollar but eventually closed at N1,431.49 per dollar. The parallel market also saw positive movement, with the naira closing at N1,470 per dollar on Friday, up from the N1,600 per dollar  it was last week Monday.

This uptick comes in the wake of an announcement by the CBN on Wednesday, confirming the clearance of its entire verified foreign exchange backlog.

Analysis have shown that the 16 big manufacturing companies whose financial results were released on the Nigerian Exchange Limited, NGX, for the financial year ended December 31, 2023 recorded a combined FX loss of over N792 billion from N118.9 billion in the corresponding period of 2022, indicating 566% increase.

The companies also recorded a combined loss before tax of N196.788billion, down by 139% from a profit before tax of N503.862 billion recorded in 2022.

However, the 16 manufacturing firms recorded combined revenues of N6.356 trillion up by 28% from N4.967 trillion in 2022.

The 16 companies that recorded FX loss include: Nestle Nigeria N 173.925 billion, Nigerian Breweries N153.332 billion, NASCON Allied N8.539 billion, International Breweries N 57.599 billion, BUA Cement N69.950 billion, Lafarge Africa N 21.0 billion, Guinness Nigeria N49.1 billion , Cadbury Nigeria N18.299 billion, Dangote Cement N 164.077 billion, BUA Foods N 73.561 billion.

Others are Dangote Sugar N148.328 billion, Okomu Oil N 0.207billion, Notore Chemical N5.59 billion, Vitafoam Nigeria N 0.103 billion, Beta Glass N 0.981 billion and Unilever N6.945 billion.