Business
Cadbury, Guinness, others lost N472bn to naira depreciation
Some major fast-moving consumer goods companies, including Cadbury, Guinness Nigeria and Nestle lost the sum of N472.3bn to naira depreciation during the first nine months of 2023, according to a new report by Meristem.
The report noted that the high inflation rate exerted significant pressure on production costs within the consumer goods sector, particularly affecting food and beverage manufacturers.
It added that the increased costs of essential raw materials such as grains, dairy, and meat directly impacted production, leading companies to either absorb the expenses or pass them on to consumers through higher prices.
The report read in part, “For the majority of companies in the consumer goods sector, which heavily rely on the importation of raw materials, the weakened Naira translated into significantly higher import bills, thereby leading to a substantial increase in production costs.
“Moreover, companies holding foreign-currency-denominated debts, like Nigerian Breweries Plc, Nestle Nigeria Plc, and Guinness Nigeria Plc, Cadbury Nigeria Plc, faced higher debt burdens, more expensive letters of credit and substantial.
“This placed significant strain on the profitability of these industry players, leading a number of these players to report after-tax losses for both Q2:2023 and Q3:2023.
“As of 9M:2023, foreign exchange losses for major players in the industry stood at NGN472.35bn, further underscoring the magnitude of the challenge posed by the naira’s depreciation on the financial health of consumer goods companies.”
With Nigeria’s inflation reaching its highest levels in over 18 years (28.20 percent YoY as of November 2023), the report said fundamental aspects such as consumer behaviour, purchasing power, and spending patterns felt the impact, leaving an indelible mark on the industry’s overall dynamics.
It added, “Reflecting the broader macroeconomic terrain of the nation, the consumer goods sector has grappled with a host of pervasive challenges.
“These challenges range from foreign exchange shortages and the Naira devaluation, lower purchasing power of consumer due to the unabated inflationary pressures, the rising cost of commodities, amongst others.”
It noted that while positive signs, such as anticipated price hikes and robust sales during the festive season, are set to drive increased revenue, several concerns cast shadows over this outlook.
It also predicted that the ongoing inflation surge, coupled with the naira’s continued depreciation and challenges in foreign exchange liquidity, are expected to weigh on companies’ profitability.
It read further, “Moving forward, into 2024, we anticipate more players in the industry to engage in business restructuring, strategic acquisitions, and expansions to sustain profitability and navigate the challenging operating conditions in the Nigerian market.
“Despite ongoing struggles with rising costs due to inflation and substantial FX losses affecting their bottom line, we foresee consumer goods companies adapting their product categories to remain relevant and innovative, aiming to stay ahead of the curve in serving evolving consumer needs.”
The PAPERS had reported earlier that about nine of Nigeria’s top firms lost N960.18bn to the new forex policy in the second quarter of 2023.
According to the half-year financial reports of the firms, the steep devaluation of the naira, following the Central Bank of Nigeria’s attempt to close the gap between the official and parallel rates of the naira, negatively impacted their businesses.
The firms included MTN Nigeria Communications Plc, Airtel Africa Plc, Dangote Cement Plc, Dangote Sugar Refinery Plc, Nestle Nigeria Plc, MRS Oil Nigeria Plc, Guinness Nigeria Plc, Nigerian Breweries Plc, and Seplat Energy Plc.
Speaking with Sunday PUNCH on the primary reason behind the losses recorded by the firms, a finance expert at the Pan-Atlantic University, Lagos, Associate Professor Olusegun Vincent, blamed foreign currency-denominated commitments made by the companies.
According to him, for companies to avoid being caught in the whirlwind, conscious efforts must be made to hedge against currency devaluation.
The efforts, he said, might include making investments in foreign currencies and avoiding too many foreign debts.
Vincent said, “When the exchange rate is floated in a country like ours, we are bound to face consequences. The consequences of such will permeate both the government and the corporate bodies. Everybody will suffer from it.
“At the corporate level, many companies are bound to experience loss because there is that exposure when you have some of your debt denominated in foreign currency. Many of our companies have loans and commitments in their books that are denominated in dollars. By accounting standards and accounting practices, the fair value of such transactions has gone up. That is the provision of accounting.
First Bank of Nigeria Limited (FirstBank) has secured a significant victory at the Court of Appeal in its case against General Hydrocarbons Limited (GHL) filed by their lawyers Babajide Koku SAN and Victor Ogude SAN, as reported by Nairametrics.
In its ruling on Thursday, 11 September 2025, the Court of Appeal set aside the earlier decision of the Federal High Court, Port. Harcourt, Obile J, which had dismissed FirstBank’s claims regarding the fraudulent diversion of proceeds from the sale of crude oil cargo pledged as collateral for loan facilities.
The dispute arose from crude oil aboard the FPSO Tamara Tokoni, which GHL had pledged to FirstBank as security for substantial loan facilities. Contrary to the terms of the pledge, GHL diverted the proceeds from the sale of the cargo, prompting the Bank to seek legal redress.
FirstBank filed an appeal challenging the trial court’s decision that had treated the matter as a simple debt recovery. The Court of Appeal, in its ruling, affirmed the maritime nature of the claim and emphasised the importance of preserving the Res, the crude oil cargo, as the central issue in dispute. The Court set aside the earlier order of the trial court vacating the order of arrest of the 2nd respondent.
The appellate court allowed FirstBank’s appeal and set aside the Federal High Court’s ruling. It authorised the sale of the crude oil cargo aboard FPSO Tamara Tokoni, with the proceeds to be deposited into an interest-yielding escrow account under the custody of the Chief Registrar of the Court of Appeal, pending the hearing and determination of the case at the trial court and the court of arbitration. The Chief Registrar was also appointed to take possession of the cargo and ensure its protection against dissipation or unauthorised disposition by any party.
This ruling marks a significant milestone for FirstBank and reinforces the Bank’s commitment to upholding the integrity of financial transactions and protecting the interests of its stakeholders.
FirstBank remains steadfast in its dedication to sound corporate governance, legal compliance, and the protection of its assets. The judgment of the Court of Appeal sets a strong precedent for the enforcement of collateral agreements and accountability in high-value commercial transactions.
There has been a surge of enthusiasm among many Nigerians as President Tinubu’s economic policies begin to yield promising outcomes.
The Central Bank of Nigeria (CBN) has enacted more stringent controls while sustaining a lower exchange rate at the official windows. Click link to continue reading.
The black market exchange rate for the dollar to naira continues to highlight Nigeria’s forex supply challenges, with many individuals and businesses relying on the parallel market for transactions.
CBN maintains tighter controls and a lower rate at official windows, limited access and allocation restrictions force most importers, businesses, and students abroad to turn to the parallel market, where prices reflect actual demand and supply pressures. Click link to continue reading.
The Dollar to Naira exchange rate in the black market continues to highlight Nigeria’s forex supply challenges, with many individuals and businesses relying on the parallel market for transactions.
CBN maintains tighter controls and a lower rate at official windows, limited access and allocation restrictions force most importers, businesses, and students abroad to turn to the parallel market, where prices reflect actual demand and supply pressures. Click link to continue reading.
The exchange rate of the Dollar to the Naira in the black market serves as a stark indicator of the ongoing foreign exchange supply challenges facing Nigeria.
As the official market remains constrained by stringent regulations enforced by the Central Bank of Nigeria (CBN), many individuals and businesses find themselves increasingly dependent on the parallel market to fulfill their currency needs.
The naira traded near a five-month high at 1514.86/$ on the official window at the close of last week, according to data from the Central Bank of Nigeria.
This indicates a strong start to September for the domestic currency, which started the month at 1,526.09/$ before closing at 1,514.86/$ on Thursday at the Nigerian Foreign Exchange Market.
The naira had last strengthened below the 1515/$ mark on March 6, when it closed trading at 1,512.30/$ on the NFEM. At the parallel market, it also appreciated, rising to 1,538/$, a 0.02 per cent strengthening.
Analysts maintain that the strength of the naira has been supported by improved liquidity and sustained dollar inflows. The Central Bank of Nigeria also intervened in the market to the tune of about $15bn.
Reviewing the FX market in the past week, AIICO Capital said the FX market opened the week on a calm note, with balanced flows keeping rates stable around $/N1527–1533 and no need for CBN intervention.
“Mid-week, offshore supply and opportunistic buying supported sentiment, lifting NAFEX fixing to $/N1528.13. Activity remained fluid with tight bid-offer spreads, as rates retraced to $/N1527.00 before stabilising.
Momentum improved further as the CBN intervened with $15m, and additional portfolio flows boosted supply, driving a sharp rally to the $/N1519–1523 range.
“By week’s end, the naira sustained gains, trading between $1508.00 and $1529.00. Overall, the currency appreciated strongly, closing at $/N1,514.8671,” said the AIICO Capital experts.
The weekly market report from Cowry Asset Management read, “In the coming week, we expect the naira to trade relatively stable across both the official and parallel markets, supported by sustained dollar inflows and a modest buildup in external reserves. However, pressures from speculative demand and global oil price volatility may cap further gains. The outcome of the OPEC+ meeting will be a key driver for crude oil prices, with any adjustments to production levels likely to influence Nigeria’s external earnings and, by extension, FX market dynamics.”
On the macroeconomic front, the country’s external reserves recorded a modest uptick, rising 0.10 per cent week-on-week to $41.31bn from $41.27bn, largely supported by stronger foreign inflows.
Analysts maintained that this increase in reserves provides an important buffer against external vulnerabilities such as volatile oil prices and currency pressures. It also offers the CBN greater capacity to intervene in the foreign exchange market when necessary, helping to stabilise the naira in the near term.
The outlook for the naira remains stable in the near term, supported by improved US dollar supply.
The black market exchange rate of the dollar to naira continues to highlight Nigeria’s forex supply challenges, with many individuals and businesses relying on the parallel market for transactions.
CBN maintains tighter controls and a lower rate at official windows, limited access and allocation restrictions force most importers, businesses, and students abroad to turn to the parallel market, where prices reflect actual demand and supply pressures. Click link to continue reading.
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