MultiChoice Group says it remains committed to the turbulent Nigerian market, despite extreme currency volatility, high inflation and an economy taking severe strain.
The South African pay-television operator published its 2024 annual results on Wednesday, which showed the Nigerian operation contributed more than US$217 million in foreign exchange losses in the past 12 months.
Inflation is more than30% in Nigeria – driven higher by the crashing naira and the withdrawal of fuel subsidies – has also exerted considerable pressure on consumer spending, with people forced to choose between paying for entertainment and necessities like food.
“We have taken a $217 billion forex hit in Nigeria alone. That $217 billion is four times bigger than what it has been in the past four financial years combined,” said MultiChoice Group CEO Calvo Mawela in an interview with TechCentral about the results.
He said the broadcaster still believes Nigeria’s government, under recently appointed President Bola Tinubu, is making the correct policy choices that will lead to an improvement in the country’s macroeconomic conditions, even if it means companies that operate there are taking severe short-term pain.
The policy changes are “what everyone has been calling for – they removed the oil subsidy and let the market decide where the naira has to trade”.
“This is short-term pain for long-term gain. Provided they continue with these reforms, it will pay off,” Mawela said. “We think the worst should be behind us [in Nigeria]. There is some stability now in terms of currency depreciation. If they continue with the removal of the oil subsidy, the fiscus will benefit and there will be investment into infrastructure.”
MultiChoice this week said its group subscriber base declined by 9%, with much of that blamed on a 13% decline in the “rest of Africa” segment as “mass market customers in countries like Nigeria had to prioritise basic necessities over entertainment, while the South African business showed more resilience with a 5% decline”.
The challenges in Nigeria led to an 18% decline in active subscribers (against growth of 13% in 2023). As a result, Nigeria’s contribution to “rest of Africa” revenues tumbled from 44% to 35%.
The group remitted US$184-million from Nigeria in the 2024 financial year, up from $132-million in 2023 when there was a greater divergence between the official and parallel exchange rates.
It held $39-million in cash in Nigeria at year-end, down from $104-million at the 2023 year-end, a consequence of consistent focus on remitting cash and the impact of translating the balance at the weaker naira, MultiChoice said.
