Devaluation: Naira set to appreciate in coming days—Ogunsowo

 

 

Joseph Irikefe

 

Nigerian currency free fall against the US dollar in the foreign exchange official and black market is over, says Olusegun Ogusanya, Airtel CEO, while addressing the company’s recent losses over naira depreciation.

The managing director of Airtel Africa Plc, the third biggest telecommunications company in Africa’s most populous nation, he believes that Nigeria won’t see a fresh major currency devaluation in the months ahead.

He told Bloomberg that Nigeria is unlikely to see another steep devaluation of its currency that Nigeria is unlikely to see another steep devaluation of its currency.

Airtel Nigeria reported a $471 million foreign exchange loss for the six months from April to September 2023 due to the depreciation of the naira.

Meanwhile, to tackle the forex challenges, the Central Bank of Nigeria has commenced the payments of forex debt owed to international banks, investors and companies.

One of the foreign banks, Citi Bank, confirmed the development. The bank noted: “It is a gradual payment that was done secretly, CBN didn’t make a fuss about it. It started yesterday and continued all through the night.”

Advocacy Times learnt that that the CBN supplied commercial banks with about $6.7 billion on November 2, 2023, to clear the long overdue backlogs plaguing the naira

In a related development, our correspondent learnt that the dollar, for the first time since September 20, 2023 (44 days ago), is selling below N1, 000 at the Peer-to-peer (P2P) segment of the foreign exchange market. More gains are expected in the coming days as the CBN also anticipates an inflow of $10 billion to boost the market.

“I do not think we are going to have another massive devaluation from where we are now like we had in our first quarter,” Ogunsanya said in a phone interview from Dubai. “The devaluation after the first quarter has not been as massive.”

British International Investment opens in Nigeria with $1bn pledge

The optimism is being expressed as it has been disclosed that the British International Investment Plc, the UK government’s development finance institution, opened an office in Nigeria this week and said it aims to commit $200 million before the end of the year.

“We intend to invest about a billion dollars every year in Africa and a larger proportion of that investment will come to Nigeria,” Benson Adenuga, who will lead the new office, said in an interview on Wednesday in Lagos.

“When you have that focus and you have that level of exposure you want to ensure that you have the people on ground who are going to push that investment agenda.”

The office will be located in Lagos, Nigeria’s commercial hub, and will serve as regional headquarters for BII’s West African operations. It will be the agency’s fourth office on the continent and joins operations in South Africa, Kenya and Egypt.

The lender said last year it plans to invest $6 billion in Africa over the next five years in areas ranging from renewable power and digital infrastructure to supporting women-owned businesses. In Nigeria, it will support government’s development initiatives through investments in key sectors such as food security, power infrastructure and manufacturing, according to Adenuga.

Since taking office in May, Nigerian President Bola Tinubu has been on a drive to revive one of Africa’s biggest economies after years of economic stagnation. He has ended costly fuel subsidies, eased foreign-exchange controls, begun overhauling Nigeria’s chronically inadequate power sector, and declared a state of emergency to improve food security threatened by surging inflation.

BII plans to complete investments in two Nigerian agriculture and processing firms by year-end after signing deals to invest $26.5 million in AFEX Commodities Exchange Ltd., Adenuga said. “We see the emergency on Nigerian food security; we see the infrastructure gap, so there’s a lot that needs to be done.”