MTN & Airtel Slash $1.2B in Foreign Debt to Stabilize Amid Naira Volatility

MTN Nigeria & Airtel Africa Cut Foreign Debt to Ease FX Burden

MTN Nigeria and Airtel Africa have aggressively reduced their foreign currency debt, repaying $1.2 billion in 2024. This move aims to ease foreign exchange (FX) risks, restore profitability, and strengthen their financial positions following steep losses caused by the naira’s depreciation in 2023.

Both telecom giants suffered a combined FX loss of $1.56 billion due to Nigeria’s foreign exchange market unification in June 2023. The policy change led to the naira devaluing from 471/$ to 1512.3/$ by March 2025.

How FX Volatility Impacted MTN & Airtel

📉 MTN Nigeria’s First-Ever Loss:

• Reported a N137 billion loss after tax in 2023—the first since its 2019 listing.
• Despite a record revenue of N3.36 trillion in 2024, it still posted a N400.44 billion loss after tax, largely due to FX losses.
• Without FX losses, MTN would have posted a N247.3 billion profit.

📉 Airtel Africa’s Struggles:

• Incurred an $89 million loss in its fiscal year ending March 2024.
• Revenue fell 5.78% to $3.64 billion in the first nine months of 2024.
• Despite revenue losses, profit after tax jumped 12,300% to $248 million from just $2 million the previous year.

Massive FX Debt Repayments & Local Borrowing Strategy

Both companies took drastic measures to cut their FX exposure:

✅ MTN Nigeria:

• Reduced its outstanding dollar obligations from $416.6 million to just $20.8 million.
• Restructured its loan portfolio: 72% in naira, 28% in dollars (compared to 56% naira, 44% dollars in 2023).
• Slashed total net debt by 29% to N591 billion.
• Raised N190 billion through a commercial paper issuance to fund local operations.

✅ Airtel Africa:

• Repaid $739 million in foreign currency debt in 2024.
• Now holds 92% of its debt in local currency, up from 79% in 2023.
• Reduced its overall FX exposure, with just 8% of OpCo debt in foreign currency.

According to Modupe Kadri, CFO of MTN Nigeria, the telco’s total foreign exchange exposure was cut from $1 billion to $300 million by the end of 2024.

Cost-Cutting Moves: Tower Lease Renegotiations & Local Solutions

Beyond debt reduction, telcos are renegotiating infrastructure costs to further minimize FX risks.

📌 MTN’s renegotiation with IHS resulted in N113.8 billion in operational savings.
📌 Both telcos are prioritizing local solutions to limit exposure to FX fluctuations and high energy costs.

Karl Toriola, CEO of MTN Nigeria, emphasized that the company is focused on:
🔹 Cost savings through an expenditure resiliency program.
🔹 Localizing operations to reduce FX dependency.
🔹 Improving financial resilience through strategic investments.

Regulatory Boost: Tariff Hike & Future Outlook

With regulatory approval for a 50% increase in telecom tariffs, the sector is on track to restore profitability. Analysts believe that:

🔹 The tariff increase will boost revenue growth.
🔹 FX debt reduction efforts will ease financial strain.
🔹 Cost-cutting measures will help improve margins.

📊 The combination of these strategies is expected to help MTN and Airtel regain financial stability in 2025 and beyond.