MTN Nigeria Battles Naira Devaluation, Inflation, and High Interest Rates

March 18, 2025

2 minutes read

MTN Nigeria

MTN Group (MTNJ.J) has faced significant financial challenges as the devaluation of the naira contributed to an annual pre-tax loss of 4.4 billion rand ($243 million). However, CEO Ralph Mupita remains optimistic about the company’s recovery in Nigeria.

Impact of Naira Devaluation and Economic Challenges

Nigeria’s chronic dollar shortages have led to a series of government-initiated currency devaluations, aimed at stabilizing the naira and attracting foreign investment. This, combined with high inflation and interest rates, has significantly increased MTN Nigeria’s operational costs.

As a result, MTN Nigeria (MTNN.LG) saw its pre-tax loss rise by over 200% to 550.3 billion naira ($355.76 million), worsening the company’s financial standing. On a group level, the South African-based telecom giant shifted from a 12.2 billion rand profit in 2023 to a 4.4 billion rand loss by the end of 2024.

READ ALSO: Oil Prices Surge as U.S. Strikes Yemen’s Houthis, Boosting Brent Above $71

Strategic Moves for Recovery

To counter financial pressures, MTN Nigeria has implemented several recovery strategies:

  • Renegotiating tower leases to cut operational costs.
  • Tariff increases approved in January to boost revenue.
  • Cost-saving initiatives, which have already saved 3.8 billion rand, with 1.2 billion rand coming from revised lease agreements.

Despite these setbacks, Mupita expressed confidence, stating, “That pain which we’ve had for 18 months is abating somewhat… The business is growing very strongly. So I’m actually very bullish and confident that we’ll see strong recovery in Nigeria.”

Broader MTN Group Performance

Beyond Nigeria, MTN’s operations in Sudan have suffered due to ongoing armed conflict. The company reported impairments of 11.7 billion rand, though some network sites in conflict zones, including Khartoum, are gradually coming back online.

Stock Market and Revenue Outlook

  • By 12:20 GMT, MTN shares rose 2.39% in response to the company’s outlook.
  • Group service revenue dropped by 15% to 177.8 billion rand, but in constant currency terms, it increased by 14%.
  • Financial analysts believe that despite currency issues, MTN’s service revenue and execution strategy remain strong.

While macroeconomic factors remain a challenge, MTN’s leadership remains focused on financial recovery and long-term growth.

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