Africa’s richest man loses $2.6 billion amid naira’s descent as worst-performing currency

Africa’s richest man Aliko Dangote has seen his wealth decline by $2.6 billion after a surge in April fueled by the Nigerian naira’s rally.

Dangote, founder and chairman of Dangote Group, the continent’s largest diversified manufacturing and industrial conglomerate, is now worth $15.1 billion, according to the Bloomberg Billionaires Index.

Dangote sees $2.6-billion wealth decline after naira rally fizzles

The decline follows a brief uptick in April fueled by the Central Bank of Nigeria’s (CBN) efforts to address a backlog of dollar obligations, which strengthened the naira. That rally propelled Dangote’s wealth to $17.7 billion but proved short-lived. With the naira now the world’s worst-performing currency, Dangote has now suffered significant wealth losses.

Dangote’s net worth now sits at $15.1 billion, a decline of $2.6 billion from its peak of $17.7 billion on April 16. The earlier rise was fueled by a strengthening naira, as the CBN cleared a backlog of dollar-denominated obligations and narrowed the interest rate gap.

Aliko Dangote’s net worth impacted

However, the recent naira weakness against the U.S. dollar has reversed Dangote’s year-to-date gains. From a peak increase of over $2.6 billion on April 16, his wealth increase has shrunk to a mere $28 million.

This decline is primarily due to the impact of the naira’s depreciation on his 86 percent stake in publicly traded Dangote Cement, alongside his holdings in Dangote Sugar, Nascon Allied Industries, and United Bank for Africa.

Dangote’s most valuable privately held asset, Dangote Fertilizer, with a production capacity of 2.8 million tonnes of urea annually, remains steady at $5.15 billion. It sits alongside Dangote Cement, currently valued at $6.7 billion, as his two largest assets.

Naira slumps, renewing pressure on CBN for rate hike

The naira’s recent slide has intensified calls for the CBN to raise interest rates. The currency has depreciated to a fresh low of 1,466.31 per dollar, weighed down by a scarcity of U.S. dollars in the domestic market.

This volatility follows the Nigerian president, Bola Tinubu’s, relaxation of foreign exchange controls in June. Since then, the naira has shed roughly 68 percent of its value against the greenback. This raises the prospect of another interest-rate increase by the CBN at its forthcoming policy meeting on May 21.