Aliko Dangote, Africa’s richest man, saw his wealth valuation dip significantly in dollar terms amid the naira devaluation and recent sell-offs in Dangote Cement. The Kano-born billionaire lost $651 million on Friday and is down by $1.3 billion this year.
The NGX data on Friday showed that investors reduced their exposure to Nigeria’s most valuable company despite its impressive performance based on its latest earning results.
Dangote Cement is almost on pace to surpass its turnover for the previous year, having already topped its total revenue for 2022 with N1.8 trillion in the first half of this year.
Data from Dangote Cement’s most recent earnings report indicate that the business benefited from early-year gains in cement prices in Nigeria, which allowed it to sell a ton of clinker at an average price of N127,614, up from N71,766 a year earlier.
However, fuel and electricity alone account for over half of direct expenses, and year-over-year increases of 138.7% were observed. In comparison to N113.3 billion during the same time last year, the corporation experienced a net foreign exchange loss of N201.3 billion.
The top cement manufacturer, with total assets valued at N5.4 trillion, had its market capitalization drop to N10 trillion on Friday from N11.2 trillion on Thursday.
Naira’s deprecation is net negative for Dangote
The naira’s recent depreciation also added to Dangote’s wealth decline. The Nigerian naira continues to be among the poorest-performing currencies in Africa, having had its worst year since democracy was restored in 1999.
The naira is down by 43% so far this year. Since President Bola Tinubu partially lifted fuel subsidies and loosened currency regulations to entice international investment, it has lost about 70% since President Tinubu resumed office, contributing to a dip in Dangote’s net asset value, mainly because of his exposure to naira-denominated assets.
Dangote has maintained his position as Africa’s richest person for 12 consecutive years. According to data from the Bloomberg Billionaire Index, he is currently placed 152nd; he is the only Nigerian citizen continually ranked on the list since its launch.
Still, the price does not include the $20 billion refinery situated in Nigeria’s business capital. Shares in Nascon Allied Industries, United Bank for Africa, and Dangote Sugar are among Dangote’s other publicly traded holdings, directly and through his Dangote Industries, which comprises closely allied businesses involved in food, fertilizer, and petroleum.
Dangote Refinery denies report on crude oil sales to other traders
According to the Dangote Oil Refinery, contrary to what a media outlet claimed, it does not resell crude oil to other traders.
The refinery denied any problems with its crude distillation facilities in a statement released on Saturday by Group Chief, Branding and Communication Officer Anthony Chiejina.
A section of the foreign media reported that the refinery was reselling crude oil shipments from Nigeria and the United States due to technical difficulties in the multi-billion dollar refinery.
Chiejina, the refinery’s spokesperson, said, “Our attention has been drawn to a misleading report suggesting that our refinery’s crude distillation unit (CDU) is experiencing issues and that we are reselling crude oil. We strongly dispute these claims. We advise the public to disregard these false narratives, which are likely driven by interests opposed to the local refining of fuels. The Dangote refinery is not authorized to sell crude oil purchased from Nigeria, and our CDU is fully operational and functioning optimally.”