The MTN Group Limited anticipates that the naira will be devalued after next year’s election, saying that the move will boost its import costs in Nigeria.
Declining oil exports and prices means that the Central Bank of Nigeria (CBN) will face difficulties in keeping the naira stable against the dollar before the February 14, 2015 vote, Bloomberg quoted MTN Nigeria’s Chief Financial Officer, Andrew Bing to have said in an interview in Lagos.
The official peg may have to be lowered by three or four percent, he said.
Mr. Godwin Emefiele, who becomes the CBN governor in June, had told the Senate in March that a devaluation of the naira is “not an option” and would be “devastating” for the economy.
“No matter what Godwin wants it has to happen, otherwise this economy in a year will be down the tube,” said Bing, 49, who is leaving his position for a sabbatical at the end of this month.
“I don’t think it will happen this year,” he said.
A devaluation would be “politically unpalatable” and it may rather happen “after the election,” Bing said.
The central bank spent the most reserves this year in the foreign-exchange market since 2010 to shore up the naira after it tumbled to a record low in late February against the dollar.
The CBN targets a range for three per cent point above or below N155/$1 at its twice-weekly currency auctions. The currency gained 0.1 per cent to N161.85 per dollar at the interbank market yesterday.
Changing the naira’s peg would make imports more expensive for MTN, Bing said.
The company has 57.2 million subscribers in Nigeria, which is Africa’s most populous country and has its biggest economy.