South African cable tv company, MultiChoice Group, has revealed that its management is facing liquidity constraint in Nigeria, and has to retrieve the company’s funds at a greater cost from the country, which is its second largest market in Africa.
In Nigeria, there are multiple foreign exchange rates, with the official market, Investors and Exporters window, offering $1 at N420.12, while the black market is selling one dollar at N620, as on Monday.
While the company didn’t state the amount repatriated so far, MultiChoice has reduced its cash in the Nigerian market down to $155 million, “Although liquidity challenges continued in Nigeria, the group successfully repatriated cash throughout the financial year, albeit at a premium to the official rate. Consequently, local cash balances in Nigeria were maintained at ZAR2.3bn (USD155m).” The firm said in its first quarter of 2022 financials.
It stated further that the company’s cash in the Nigerian market, and the rest of Africa where MultiChoice operates its cable TV business, is exposed to rise, as the capital could lose value due to their weak currency, “Cash holdings of ZAR2.5bn (FY21: ZAR2.5bn) held in Nigeria, Angola and Zimbabwe remain exposed to weaker currencies.”