Tony Elumelu, the renowned Nigerian multimillionaire businessman, has suffered a significant blow to his fortune due to the recent devaluation of the naira, despite United Bank for Africa (UBA) shares soaring by almost 40 percent in the past 38 days.
The devaluation of the naira by the Central Bank of Nigeria has eroded the gains that Elumelu would have enjoyed from the surge in UBA’s shares.
According to research conducted by Billionaires.Africa, Elumelu’s 7.17-percent stake in UBA would have seen an increase of $16.8 million in market value during the past 38 days if not for the currency devaluation.
However, between May 10 and June 17, the devaluation caused a $1.1-million decline in Elumelu’s stake, completely wiping out the potential gains he could have achieved.
The devaluation occurred on Wednesday, June 14, when trading restrictions on the official market were lifted, resulting in the naira reaching an all-time low of 750 to the dollar. This marked a significant drop from the previous day’s rate of 477 naira to the dollar.
This recent move comes after Nigerian President Bola Tinubu suspended the Central Bank governor, expressing concerns over the multiple exchange rates implemented by the bank. These varying rates had caused a shortage of foreign currency, making it difficult for investors to repatriate funds from Africa’s largest economy.
As a direct consequence of the currency depreciation, Elumelu witnessed the market value of his UBA stake decline by $16.5 million, plummeting from $57.9 million to $41.4 million between Wed., June 14, and Fri., June 16.
The devaluation of the naira has underscored the challenges faced by Nigerian businessmen with naira-denominated assets, highlighting the volatility of the country’s currency.
Despite the impressive surge in UBA shares, Elumelu’s financial setback demonstrates the impact that currency fluctuations can have on individuals and their investments.
