Aliko Dangote, the business magnate behind the $20 billion refinery in Nigeria’s business capital, has seen his wealth decrease by more than $1 billion this year.
This decline is mainly due to the steep fall in the naira’s value and recent moderation in the value of his equity holdings.
Bloomberg data shows that Africa’s richest man is ranked 145th on the list of the world’s wealthiest individuals.
In addition, Dangote is the only Nigerian-born billionaire among the top 500 richest people globally. The 67-year-old industrialist is also recognized as the richest Black man on earth.
He remained Africa’s richest person for 12 consecutive years and ended the year with a net worth of $13.9 billion. Bloomberg Billionaires Index data reveals that the Kano-born billionaire’s wealth dropped by $1.17 billion. However, the refinery business has not yet been added to his valuation.
According to the most recent SEC documents, he holds at least 86 percent of the publicly traded company Dangote Cement. With a yearly manufacturing capacity of 48.6 million metric tons, the cement giant is Nigeria’s most valuable company, with a market valuation of N10.1 trillion. Shares in NASCON Allied Industries, Dangote Sugar, and the United Bank for Africa are among Dangote’s other publicly traded holdings.
The Dangote Group, a major economic force in West Africa and one of the largest corporations in the country, disclosed that its various subsidiaries paid N474 billion in taxes to the federal government over the last three years.
The Nigerian naira had its worst year since democracy was restored in 1999, making it one of the continent’s worst-performing currencies. The naira experienced significant devaluation following the liberalization of the foreign exchange regime in June, as part of efforts to boost the economy.
Foreign exchange losses and the Securities and Exchange Commission’s decision to deny the Dangote Group’s merger request, which included Dangote Sugar Refinery and NASCON Allied Industries, have been blamed for the recent decline in the value of some of his holdings. Persistent inflationary pressures and fluctuations in currency exchange rates have exacerbated these difficulties, further squeezing profit margins.
Dangote Industries Limited (DIL) plans to sell a 12.5 percent stake in its 650,000 barrels-per-day oil refinery. Moreover, the naira’s weakness against the dollar exacerbates Dangote’s liquidity issues by creating a discrepancy between debt denominated in US dollars and revenues in local currency.
DIL suffered a substantial $1.07 billion foreign exchange loss in 2023. Notably, Dangote, which already faces supply issues with its refinery in Nigeria, has encountered another setback due to this unfavorable rating from Fitch.
The Dangote Group has declared its intention to generate roughly $30 billion in revenue by 2025, aiming to dominate the foreign exchange (Forex) market going forward. Alhaji Aliko Dangote outlined these goals and mentioned the group’s intention to detach itself from the Central Bank of Nigeria (CBN) regarding currency supply. He emphasized the need to diversify the group’s revenue streams and eventually reduce its stake in the cement company from 75% to 15%. Additionally, he highlighted plans to realign EBITDA earnings, shifting from a predominance of Nigerian revenue to a fifty percent foreign base. The group forecasts that 90 percent of its total turnover will come from foreign exchange earnings.