Aliko Dangote, Africa’s wealthiest individual, experienced a significant decline in his wealth due to the naira devaluation and recent sell-offs in Dangote Cement.
The Kano-born billionaire lost $651 million on Friday and has seen a total decline of $1.3 billion this year. According to NGX data, investors have reduced their exposure to Nigeria’s most valuable company despite its strong performance in recent earnings reports. Dangote Cement’s revenue for the first half of this year reached N1.8 trillion, surpassing last year’s total turnover.
Dangote Cement’s recent earnings report shows it benefited from higher cement prices in Nigeria, selling a ton of clinker at an average price of N127,614, up from N71,766 the previous year. However, the company’s direct expenses were heavily impacted by fuel and electricity costs, which saw a year-over-year increase of 138.7%. Additionally, the company experienced a net foreign exchange loss of N201.3 billion, compared to N113.3 billion the previous year. As a result, Dangote Cement’s market capitalization dropped from N11.2 trillion on Thursday to N10 trillion on Friday.
The naira’s depreciation further contributed to Dangote’s wealth decline. The Nigerian naira is one of the poorest-performing currencies in Africa and has had its worst year since democracy was restored in 1999. The naira has depreciated by 43% this year and about 70% since President Bola Tinubu partially lifted fuel subsidies and loosened currency regulations to attract international investment. This decline significantly impacted Dangote’s net asset value due to his exposure to naira-denominated assets.
Despite these challenges, Dangote has maintained his position as Africa’s richest person for 12 consecutive years. He is currently ranked 152nd on the Bloomberg Billionaire Index and is the only Nigerian consistently listed since its inception. His wealth valuation does not include the $20 billion refinery in Nigeria’s business capital. Dangote also holds shares in Nascon Allied Industries, United Bank for Africa, and Dangote Sugar, both directly and through Dangote Industries, which encompasses businesses in food, fertilizer, and petroleum.
In response to allegations that the Dangote Oil Refinery was reselling crude oil due to technical issues, the refinery denied such claims. Group Chief, Branding and Communication Officer Anthony Chiejina, released a statement on Saturday refuting the report and stating that the refinery’s crude distillation unit (CDU) is fully operational. He urged the public to disregard these false narratives, emphasizing that the refinery is not authorized to sell crude oil purchased from Nigeria and that the CDU is functioning optimally.