The Group Managing Director of the Nigerian Exchange Group (NGX), Oscar N. Onyema, has stated that the current single foreign exchange window adopted by the federal government would affect dividends to be paid to investors by companies listed on the exchange.
Onyema spoke at the Economic Policy Roundtable organised by the Abuja Chamber of Commerce and Industry (ACCI), said the unification which has led to the devaluation of the Naira inadvertently wiped out the net gains and income of listed companies.
He said the situation has seen a rapid spike in the naira value of such loans of companies who are exposed in dollar loan exposures.
“Consumer goods sector is the worst hit as net foreign exchange losses have impacted significantly on their bottom-line performance, this would definitely affect dividend payment for investors who are shareholders in these companies. The reverse is the case for financial institutions such as banks who have recorded revaluation gains on dollar assets due to the strengthening of the dollars against the naira.”
He however said the unification sought to bring stability and transparency to Nigeria’s currency markets and is widely accepted as the necessary tool to halt round-tripping and arbitrage in Nigeria’s FX market.
He said the transition has disrupted businesses and the economy in several ways as businesses heavily reliant on imports may face short-term disruptions due to the sudden shift in exchange rates.
On his part, the Director General of Chartered Institute of Directors (CIOD), Dele Alimi, said the unification requires astute economic management, effective communication, and measures to mitigate the short-term impact on businesses and citizens.
The Vice President, Industry, of ACCI, Dr. Chijioke Ekechukwu, said the unification has brought about checks and balances and better accountability in Nigeria’s economy.
He however noted that it has led to high exchange rate, which has affected prices of goods and services and led to inflation rate to coast upwards.