MultiChoice blames naira depreciation, ‘japa’ trend as subscriber base drops by 18%

MultiChoice Group, an African pay-TV operator, says the economic condition in Nigeria and ‘japa‘ trend resulted in an 18 percent decline in its active subscriber base in the country.

Japa, a local parlance in Nigeria, is the relocation of Nigerians to foreign countries with better economic conditions.

In its financial result for the year ended March 31, 2024, MultiChoice said the decline saw its rest of Africa (RoA) — which excludes the South African market — subscriber base drop from 9.3 million in 2023 to 8.1 million.

The company said the removal of petrol subsidy, depreciation of the naira and soaring inflation contributed to Nigerians prioritising basic necessities over entertainment.

“The Nigerian economy and consumers faced persistent challenges through FY24,” MultiChoice said.

“The removal of fuel subsidies, sharp currency depreciation with the official naira halving in value, inflation climbing to over 30%, and higher emigration of the middle and upper class drove an 18% YoY decline in active subscribers (FY23: +13%).”

MultiChoice said this reduced Nigeria’s contribution to ROA revenues from 44 percent to 35 percent.

Also, the company said the decline in the ROA subscriber base led to a nine percent decline in the group’s total active subscribers.

“The group’s 9% decline in active subscribers was mainly due to a 13% decline in the Rest of Africa business as mass-market customers in countries like Nigeria had to prioritise basic necessities over entertainment, while the South African business showed more resilience with a 5% decline,” the company said.

According to MultiChoice, the reviewed period is the toughest set of macro-economic conditions for
its ROA business since 2016, with high double-digit inflation in many of the group’s core markets leading to immense pressure on customer spending power.

“The official and parallel naira exchange rates reached peaks of N1600:1USD and N1900:USD respectively in February 2024, with several other African markets also experiencing extreme foreign exchange depreciation.”

Speaking on its South African market, MultiChoice said the five percent decline reported in the country’s subscriber base was driven by a lack of electricity and financial distress.

“The South African economy continues to endure severe economic pressure, with consumers under financial distress due to the cost-ofliving squeeze from high inflation and interest rates,” the company said.

“Consistent load shedding through FY24 created an environment where customers without backup power were reluctant to subscribe to our service due to the uncertainty of whether they would be able to watch.”

MultiChoice said the challenges during the period increased pressure on subscriber numbers, activity and viewership.