Connect with us
deals book
Advertisement
Polaris bank
Advertisement
Oando
Advertisement
Alpha
Advertisement
Hotflex
Advertisement
Binance
Advertisement
Advertisement
UBA
Advertisement
Patricia
Advertisement
Access bank
Advertisement
app

Billionaire Watch

Aliko Dangote and his slide from $25 billion to $7 billion

Not many can claim ignorance of the fact that Aliko Dangote is Africa’s richest man for almost a decade, he is not worth half as much as he was in 2014. 

Published

on

Not many can claim ignorance of the fact that Aliko Dangote is Africa’s richest man and has been for almost a decade.

What many do not know, however, is that despite remaining the richest man in Africa for nine consecutive years, Aliko Dangote of 2020 is not worth half as much as he was in 2014.

Dangote had been in business for more than a decade before deciding to transit from merely importing products to resell in the Nigerian market, to actually producing them in 1997. This was the year he set up a plant to produce what he had been importing in the previous years – sugar, salt, flour and pasta.

He also acquired a state-owned cement company – Benue Cement Company (BCC) – and set about expanding its operations. This marked the turn-around in his fortunes and that of Nigeria.

(READ MORE: Dangote: The King cement maker moving against all odds)

The next step was to list the companies in the Nigerian Stock Exchange, and this started in October 2010 with the listing of Dangote Cement. This must have been the game-changer for Dangote because, by the next year, his name was listed as number 1 in Forbes list of African billionaires.

By August 2014, Dangote Cement stocks were accounting for 20% of the total market capitalization of the Nigerian Stock Exchange, and the value of the stocks was growing astronomically.

Since then, Dangote has remained number 1 on the list, even though his position on the global ranking has not been too predictable.

The rest, as they say, is history.


But why don’t we take a look at history and see how the Billionaire’s fortunes have fared over the years.  

Dangote first became richest African in 2011, with a net worth of $13.8 billion, a major increase from $2.1 billion the previous year.

(READ MORE: 10 fantastic things Aliko Dangote has done in the last 10 years)

This placed him in the 51st position on the global ranking, and second in the Middle East and Africa, second only to Saudi Prince Alwaleed bin Talal Alsaud who was worth $19.6 billion.

In March 2012, there was a slight decline to $11.2 billion.

Jaiz bank

In March 2013, his worth had risen to $16.1 billion, and by June 2013 Dangote went down in history as the first African entrepreneur to hit a personal net worth of $20 billion.

In February 2014, Aliko Dangote’s worth hit the highest ever at $25 billion.

Then the decline started.


In February 2015, his net worth dropped to about $22 billion.

In January 2016, Forbes reported that Dangote’s worth had dropped by $3 billion dollars between December 31, 2014 and December 31, 2015, placing his worth at $17 billion. Two months later, it dropped further to $14.4 billion.

(READ MORE: Lafarge, Wema, UBA, Dangote Sugar lead weekly gainers’ chart)

By end of December 2016, Forbes reported that based on the stock prices and exchange rates at the time, Dangote was only worth $12.4 billion, making him one of the biggest billionaire losers for the year.

Dangote’s multi billion-dollar refinery is 75% complete, Otedola says. Aliko Dangote and his slide from $25 billion to $7 billion

app

In February 2017, the mogul’s worth was put at $12.1 billion; still first on Africa’s list of billionaires.

In January 2018, Dangote’s net worth was $12.2 billion, about $100 million dollars up from the previous year. At this time, he had started moving away from cement gradually and had made investments into fertiliser production as well as the oil refinery which is soon to start operations.

In March 2019, Dangote was worth $10.8 billion, after pocketing $650 million dividends from Dangote Cement Plc.

In February 2020, Forbes estimate and ranking showed that Dangote’s net worth had dropped by another $200 million from $10.3bn in the previous year to $10.1bn.

On 11th of April 2020, Forbes again announced that the billionaire’s worth had dropped to $7.4 billion, even though he was worth $8.3B only four days earlier. (Dangote currently worth $8 billion, as at April 16, 2020).

NOTE: Net worth of billionaires on Forbes, which reflects changes since 5pm EST prior trading day, changes based on their share values.

(READ MORE: Dangote Cement woos investors with N100 billion issue)

One has to wonder how the genius businessman has stayed as the richest man in Africa despite the several drops in his worth over the years.

Dangote Cement reveals share buyback plans, Dangote Cement Plc: Frail macro conditions to pressure earnings in 2020, Aliko Dangote and his slide from $25 billion to $7 billion

Dangote Cement factory

He is currently number 162 on Forbes list of billionaires around the world, and number 1 in Africa.


Why the fluctuations?

When Dangote’s net worth is to be calculated, the first thing to be considered apart from his personal stocks is stocks owned by the Dangote Industries Limited which he is a beneficial owner of. The DIL owns majority stocks across all subsidiaries in the Dangote Group, and added to Aliko Dangote’s personal stocks, one can see that Dangote’s net worth is largely reflective of the value of the stocks of the company in the Nigerian stock exchange.

For instance, as of March 2014 when his worth hit $25 billion, Forbes attributed it to the increasing value of the stock price of Dangote Cement Plc, making him $9 billion richer than he was a year earlier. The company had moved to become present in 15 African countries and its stock was up by 65%. However, this has changed in recent times, as the company’s stock price has also been on the decline.

According to our research findings,  the decline in this networth is due to the drop in the price of his shares in the Nigerian Stock Exchange. Nigerian stocks have largely falled over the years mostly due to the crash in oil prices that began in 2014.

(READ MORE: Dangote, Otedola, Elumelu, Ovia, others donate N19.48 billion to COVID-19 relief fund

Exchange Rate. 

Though the value of his stocks in the Nigerian bourse is an important factor, a more important and probably overriding determinant would be the exchange value of the naira to the dollar. Since the Forbes makes its estimates for global ranking purposes, the values have to be converted into the US Dollars for all the world billionaires.

According to Ajayi, the devaluation of the naira has played a critical role, because while he earns his money in naira, the ranking is done in dollars.

Ajayi was, however, optimistic that this trend would change for the billionaire as soon as the refinery kicks off operations.

“The refined products are going to be sold in dollar and I believe this would have a significant impact on his net worth. The oil refining business has a lot of dollar components and I think that is one of the attractions for him to go into that market,” he said.

(READ MORE:Dangote Cement Plc: Frail macro conditions to pressure earnings in 2020)

Over the years, the exchange rate of the naira to the dollar has been quite volatile, and Dangote finds himself on the receiving end of this volatility since his stocks are in the naira market.

Dangote Flour Mills shareholders unanimously approve company acquisition, Aliko Dangote and his slide from $25 billion to $7 billion   

A quick peek

  • In 2011, a dollar exchanged for N154.50, at about the same time Dangote’s net worth was $13.8 billion.
  • In 2012, an exchange of N157 to a dollar put his worth at $11.2 billion.
  • A dollar exchanged for N160 in 2013. At this time, Dangote was worth $20 billion.
  • In 2014, a dollar exchanged for an average of N164 and Dangote was worth $25 billion.
  • In 2015, the exchange went up to N199 to a dollar, while Dangote’s worth dropped to $22 billion.
  • In 2016, exchange was up to N300 to a dollar, and Dangote’s worth dropped again to $14.4 billion.
  • In 2017, exchange averaged between N359 to N362, while Dangote’s net worth was $12.1 billion.
  • In 2018, it was N364, and Dangote’s worth was $12.2 billion.
  • In 2019, it went as high as N391 to a dollar, while his net worth dropped to $10.8 billion.

The year 2020 has probably seen the most fluctuations in one quarter, as the first quarter of the year has seen the exchange rate sometimes soaring over N400 to a dollar, but never going below N360.

(READ MORE: COVID-19: President salutes Dangote, Elumelu, Atiku, Banks, others for support)

Aliko Dangote’s net worth started the year at $10.1 billion, declining later to $8.2 billion and currently $7.4 billion. The trend shows clearly that an appreciation in the value of the naira is more likely to give this billionaire a better ranking in the list of world’s billionaires.

Another investment expert, Mr Abimbola Olaniyi, opines that the decline of the billionaire’s net worth is significantly linked with the removal of some concessions which he enjoyed from the government before 2015.

According to Olaniyi, the billionaire had certain concessions in the area of cement production for the backward integration adopted by the government, which only allowed those with cement manufacturing plants to import cement. However, this concession was removed alongside others, putting Dangote at par with competitors and significantly affecting his net worth.

Well, considering that Dangote has investments in several unlisted firms, as well as some real estate investments which are not included in the net worth calculation since their value cannot be universally verified, one can safely conclude that his worth is well above yearly estimates drawn by Forbes.

Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career.As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

12 Comments

12 Comments

    Leave a Reply

    Your email address will not be published.

    This site uses Akismet to reduce spam. Learn how your comment data is processed.

    Billionaire Watch

    Top 5 billionaires in Europe and what they do for money

    The world billionaires list comprises an exciting set of European billionaires who made their fortune from unlikely areas.

    Published

    on

    Top 5 billionaires in Europe and what they do for money

    What would the world billionaires list look like without the American and Asian mavericks doing spectacular things in tech and other fields of endeavour? Take away these two groups and you would find an interesting crop of European billionaires who made their fortune from unlikely areas.

    Today, we will look at the top five European billionaires and what they do for money.

    5. Beate Heister & Karl Albrecht Jr. ($39.7 billion)

    Beate Heister and Karl Albrecht Jr. are German nationals and children of the founder of one of the biggest supermarket chains in Germany.

    Aldi Supermarket was founded by two brothers after World War 2 and it went on to become very successful. The brothers split at some point and one of them took over the supermarket and made a great success of it. Aldi is touted as the European Walmart.

    Together, Beate and Karl Jr. are worth $39.7 billion.

    READ: Mukesh Ambani, the richest man in Asia buys iconic $79m UK golf club with 900 years history

    4. Francois Pinnault ($52.3 billion)

    The Frenchman, Francois Pinault is the Chairman of the fashion group, Kerring which owns luxury brands like Yves Saint Laurent, Alexander McQueen and Gucci. He started his company as a wood and building materials company before diving into the lucrative world of luxury goods.

    In 1999, he bought the controlling stake in Gucci Group and this kickstarted his journey into luxury products. Francois Pinault is currently worth $52.3 billion.

    Hotflex

    3. Francois Bettencourt Meyers ($83 billion)

    She is the richest woman in the world and the third richest in Europe. Francois Bettencourt Meyers is the granddaughter of the founder of the world-famous cosmetic brand, L’Oréal. She inherited the fortune after her mother who was also the richest woman died.

    Francois Bettencourt and her family own a 33% stake in L’Oréal. The Frenchwoman is worth $83 billion.

    READ: US Tech Boom: 7% increase in valuation as 2 fresh billionaires cross the $100bn mark

    2. Amancio Ortega ($84.9 billion)

    Amancio Ortega is one of the wealthiest clothing retailers in the world. He sits on top of Inditex, a fashion company that owns several brands with over 7,500 stores worldwide.

    Inditex is listed and Amancio owns 60% of it. According to Forbes, he earns over $400 million in dividends every year.

    Amancio Ortega is Spanish and he is worth $84.9 billion.

    READ: Africa’s richest woman claims decision to freeze her assets was based on “fake passport”

    Jaiz bank

    1. Bernard Arnaut ($180.1 billion)

    He needs no introduction as we have done many articles on him already. He is the third richest man in the world and the president of Moet Hennessey Louis Vuitton Group (LVMH). His company is the biggest name in the luxury goods world with over 70 brands under it.

    According to Forbes, he pulled off the biggest brand acquisition ever when he signed in January 2021, the American jeweller Tiffany & Co for $15.8 billion.

    Bernard Arnaut calls himself the custodian of French heritage according to Forbes. His net worth is $180.1 billion.

    Continue Reading

    Billionaire Watch

    Top 5 women who became billionaires after divorcing their husbands

    The divorce of Bill and Melinda Gates is set to mint another woman billionaire.

    Published

    on

    Bill & Melinda Gates Foundation

    The divorce of Bill and Melinda Gates is set to mint another woman billionaire. Yesterday, Nairametrics reported on the first set of transactions made by Bill Gates to his ex-wife, Melinda.

    She was transferred securities worth over $1 billion, already making her a billionaire. With more transfers set to come, we want to look at 5 other women who became billionaires after divorcing their husbands.

    5 .  Sue Ann Arnall ($1 billion  

    Sue Ann Arnall was the wife of oil baron and CEO of Continental Resources, Mr Harold Hamm. The 26-year-old marriage ended in 2015 with a handwritten check of a whopping $974 million to Sue Ann, which she initially rejected on the basis that it was too small. After a series of back and forth in court, however, she finally accepted the cheque.

    Before the cheque, Harold Hamm had initially paid her over $20 million, driving the total settlement figure over a billion dollars.

    Harold Hamm is currently the 247th richest man in the world with a net worth of $8.6 billion.

    READ: There are only 15 black billionaires in the world, here are the top 10

    4.  Sue Gross ( $1.3 billion )

    The ex-wife of Bill Gross, the billionaire founder of the investment management firm, PIMCO, walked away from her 32-year-old marriage to the business mogul with a handsome $1.3 billion dollars. She started her own charity afterwards.

    Bill Gross is currently worth $1.5 billion according to Forbes. He founded PIMCO in 1971 and it became one of the most successful investment management firms in America.

    Hotflex

    READ: Squarespace founder is the latest billionaire, set to make $3bn from listing his company

    3.  Elaine Wynn ( $2 billion ) 

    Elaine Wynn is the ex-wife of Steve Wynn and she is a Co-Founder of the successful casino company, Wynn Resorts. After the couple divorced in 2012, she was transferred 11 million shares from the company which was valued at $795 million at the time.

    Her ex-husband sold a substantial amount of shares later that year, which she also got a stake in. Today, her total shares from the Wyatt Resorts are worth over $2.3 billion according to Forbes.

    READ: Is Donald Trump still a billionaire?

    2.  Melinda Gates ($1.8 billion and counting) 

    Melinda Gates is the latest billionaire divorcee on the block and she is already worth $1.8 billion after the first transfer of wealth. Her ex-husband, Bill Gates is the 4th richest man in the world. She will be worth over $60 billion if Bill Gates’ fortune is split evenly with her, although that is very unlikely.

    1.  Mackenzie Scott ($57.7 billion) 

    The ex-wife of the richest man in the world tops the list with a staggering $57.7 billion net worth. She met her ex-husband, Jeff Bezos when they both worked at a hedge fund in New York and she helped set up Amazon.

    After her divorce from Bezos in 2019, she received 4% of Amazon shares which was valued at $35 billion then. Amazon stocks have witnessed a near 75% increase since then. She is currently worth $57.7 billion according to Forbes.

    Jaiz bank

    What you should know 

    Melinda Gates may top the list after the complete transfer of wealth by her ex-husband, Bill Gates.

    Continue Reading

      





    Nairametrics | Company Earnings

    Access our Live Feed portal for the latest company earnings as they drop.