MTN Nigeria CEO, Toriola, complains of CBN’s Naira redesign policy, FX scarcity

The Chief Executive Officer of MTN Nigeria, Karl Toriola, said the telecommunications company bore the brunt of the side effect of the Naira redesign policy of the Central Bank of Nigeria (CBN) in the first quarter of 2023.

Toriola stated that the Naira scarcity caused by the CBN’s Naira redesign policy made it impossible for MTN customers without digital access to buy physical airtime vouchers.

He made this known in the 2023 first quarter (Q3) financial statement released on Thursday, disclosing the challenges faced by MTN during the period.

“In October 2022, the CBN announced the redesign and introduction of new naira notes in N200, N500, and N1,000 denominations, effective 15 December 2022.

“The CBN indicated that the new and existing currencies will remain legal tender until 31 January 2023, when the existing currencies cease to be legal tender.

“Banks’ customers were encouraged to pay the existing currencies into their bank accounts to enable them to withdraw the new banknotes once circulation began.

“The limited availability of the new notes resulted in cash shortages, which impacted our customers’ ability to recharge through physical airtime vouchers (affecting mostly customers who did not have access to digital recharge channels) and overthe-counter (OTC) transactions within our MoMo agent network.

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“The cash shortages affected the broader macroeconomy, with a consequent significant impact on the private sector,” Toriola said.

He also complained of foreign exchange scarcity which affected MTN’s ability to invest in assets to upgrade operations. Also, exchange rate volatility worsened supply chains.

“In addition, supply chains were compounded by exchange rate volatility and the availability of foreign currency needed for capex,” the CEO said.

Citing other challenges, Toriola said: “We continued to experience headwinds in our operating environment in the first quarter of 2023.

“The impacts of the ongoing global macroeconomic and geopolitical developments on energy, food and general inflation were exacerbated locally by petrol and cash shortages experienced during the period.

“This placed additional pressure on economic activity, consumers and businesses. The private sector experienced the deepest contraction in March 2023 since the recovery from the COVID-19 pandemic, driving down the PMI index to 42.3 points from 44.7 points in February 2023.

“The inflation rate in Nigeria rose to a 17-year high of 22% in March 2023, representing the third consecutive month-on-month increase in 2023, with an average of 21.9% in the quarter.”

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