The foreign exchange challenge that has plagued Nigerian companies since the start of the current administration appears to be easing, as reflected in the foreign exchange gains and losses recorded in Q1 2025 compared to FY 2023, Q1 2024, and FY 2024.
In Q1 2025, ten leading Nigerian companies recorded a net foreign exchange loss of N22.114 billion, down significantly from the combined loss of N1.179 trillion reported in Q1 2024, according to data collated by from their unaudited financial statements.
The companies span across sectors, including consumer goods, telecommunications, cement, and oil and gas, and include MTN Nigeria, Dangote Cement, Dangote Sugar, Nigerian Breweries, BUA Foods, BUA Cement, Nestlé, Cadbury, Lafarge Africa, and Aradel Holdings.
All reported significant improvements in bottom-line performance because of more favorable FX conditions.
While MTN Nigeria, Nestlé, Dangote Cement, BUA Cement, and Nigerian Breweries reported a significant decline in FX losses, Dangote Sugar Refinery, BUA Foods, Cadbury, Lafarge Africa, and Aradel Holdings recorded FX gains in Q1 2025 compared to the heavy losses reported in previous periods.
This consequently had a positive impact on earnings. Combined pre-tax profit surged by 252% to N998.1 billion in Q1 2025, compared to a pre-tax loss of N656 billion in Q1 2024.
This also represents more than a 200% increase over the combined pre-tax profit posted in both FY 2023 and FY 2024.
The improved foreign exchange situation can largely be attributed to a more stable naira exchange rate environment, improved FX liquidity, lower foreign currency debt exposure, and proactive risk management strategies by companies.
The staggering FX losses in previous quarters were mainly triggered by the sharp devaluation of the naira following the Tinubu administration’s foreign exchange unification policy launched in June 2023.
To put the FX pressure into perspective:
- The exchange rate opened 2023 at N461.50/$1,
- Closed the year at N907.11/$1,
- Ended 2024 at N1,535/$1.
This rapid devaluation caused massive FX losses for Nigerian companies. By the end of March 2025, however, the exchange rate had largely stabilized, closing at N1,537/$1, showing minimal movement from the previous quarter.
Dangote Cement topped the list with a significantly reduced foreign exchange loss of N17.47 billion in Q1 2025, representing a 72.6% decline from the N63.77 billion loss in Q1 2024.
The Q1 2025 figure is also far lower than the N249 billion loss in FY 2024 and N164 billion in FY 2023.
