‘Forex availability to shape 2024 economic performance’ - THE NATION
- Consumer demand to slow on higher prices
Availability of foreign exchange for businesses will be a deciding factor on how well the economy performs in 2024.
Group Managing Director, C & I Leasing Plc, Ugorji Lenin Ugorji said many foreign investors were interested in coming into the country but they also want to be assured their investments in naira are safe.
He said the Central Bank of Nigeria (CBN) remains at the best position to advise government on the steps to take to overcome ongoing forex crisis. He however, advised businesses to plan their forex transaction decisions wisely.
He said: “There is nothing bad if 30 per cent of a company’s loans are in dollars, but it also needs dollar revenue to pay the dollar debt”.
Ugorji, who spoke during a virtual presentation of the company’s facts behind the third quarter 2023 figures,said that C&I Leasing had to increase its forex revenues and reduce forex loans to avoid asset mismatch. “That decision gives C & I Leasing good stability to withstand turbulence,” he said.
C & I Leasing said Nigeria Gross Domestic Product (GDP) is expected to reach $489.80 billion by the end of 2023, according to analyst’s global macro models and expectations.
In the long term, Nigeria’s GDP is projected to trend around $508.41 billion in 2024 and $525.70 billion in 2025.
It added that consumers are expected to be pressured by higher prices causing demand to slow down.
Its Head Treasury, Babatunde Oguntunrin, said the company plans a N50 billion Commercial Paper Issuance, with most of the funding targeted at asset acquisition. He said the company will continue to maintain a weighted cost of capital that closes on government benchmark.
According to him, the company will further ensure an optimal equity, short & long term capital mix that will maximise all stakeholders return.
The Chief Finance Officer, Okey Nnake, said the company’s performance in the third quarter of this year, showed gross earnings of N16.3 billion, up nine per cent year-on-year ( y-o-y), driven by growth of its marine business, representing 69 per cent of total gross earnings for the nine-month period.
Its net operating income of N8.5 billion, rose 10 per cent y-o-y mainly driven by growth in marine business.
“Profit after tax of N414.1 million, up 12 per cent y-o-y, was achieved through a combination of top line growth, cost reduction initiatives and optimal utilisation of assets. Basic earnings per share of 42 kobo, up 221 per cent y-o-y , due to higher earnings,” he said. “Year-to-date growth in total assets by 25 per cent to N72.1 billion, largely driven by assets being held in currencies other than local. Capital Adequacy Ratio increased 800 basis points to 35 per cent on the back conversion of $10 million convertible note,” he said.