International Finance and Exchange Rate Exposure Management in Nigerian Multinationals

Nigerian multinationals and large enterprises engaged in international trade face multi-layered exchange rate exposure arising from transaction risk, translation risk, and economic risk, each requiring distinct management strategies. This study examines exchange rate exposure management practices among Nigerian multinational corporations and large export-oriented firms, with primary data collected from treasury and finance directors in 25 firms operating across the oil and gas, consumer goods, and agro-industrial sectors. The firms sampled maintain operations or commercial relationships spanning at least three countries and are registered with the Nigerian Stock Exchange or the Corporate Affairs Commission as large enterprises. A structured interview protocol and questionnaire are administered to assess exposure identification methods, hedging policy adoption, instrument usage, and the governance of currency risk within group treasury functions. Data are analysed using descriptive analysis, regression, and comparative case analysis. The theoretical framework draws on the multinational finance literature, specifically the exposure mapping framework and the internationalisation theory of exchange rate management. The study situates its analysis within the significant naira devaluation events of 2023 and the subsequent unification of exchange rate windows, assessing whether firms' hedging frameworks were adequate to absorb these structural shocks. Existing literature from comparable emerging market multinationals suggests that most firms hedge transaction exposure while under-managing economic exposure. Findings are intended for group CFOs, the Central Bank of Nigeria's foreign exchange policy team, and financial institutions designing bespoke currency risk management products for corporate clients. Keywords: exchange rate exposure, multinational corporations, treasury management, Nigeria, hedging strategy