Chief Financial Officers (CFOs) of Nigerian companies are grappling with significant losses stemming from the devaluation of the naira, prompting them to seek alternative revenue streams to mitigate these losses.
Amidst the challenging business environment, CFOs acknowledge their pivotal role in steering businesses towards growth, as highlighted during the Lagos Business School Chief Financial Officer Conference held in Lagos on Wednesday.
Alex Osho, Group Chief Operating Officer at Waltersmith Group, underscored the complexity of Nigeria’s economy, making it challenging to effectively hedge against currency depreciation despite the availability of hedging tools.
Despite the availability of hedging instruments, liquidity constraints and market depth pose significant hurdles for Nigerian companies, rendering them largely helpless in the face of forex losses.
Boye Olusanya, Chief Executive Officer of Flour Mills of Nigeria Plc, emphasized the importance of exploring alternative business models, such as import substitution, to minimize the impact of forex-related shocks.
Olusanya highlighted the significance of diversifying revenue streams away from forex-dependent inputs or outputs to mitigate forex risk.
Wole Adeniyi, CEO of Stanbic IBTC Bank, advised firms to adapt to currency devaluation and keep moving forward, emphasizing resilience in navigating economic challenges.
Prof. Chris Ogbechie, Dean of the Lagos Business School, emphasized the pivotal role of CFOs in today’s rapidly evolving business landscape, where they serve as stewards of financial health and drivers of strategic decision-making amidst inconsistent government policies and macroeconomic challenges.
