Naira devaluation costs Africa’s richest man Aliko Dangote nearly $10 billion

Omokolade Ajayi -

Key Point

  • Aliko Dangote’s fortune dropped nearly $10 billion in six months, from $23.3 billion to $13.8 billion due to naira devaluation and NGX pullback.
  • Dangote’s net worth fell by $9.5 billion this year, contrasting sharply with the $8.17 billion gain recorded at the beginning of 2024.
  • Nigeria’s government supports Dangote’s refinery by selling crude oil in naira, aiming to stabilize fuel prices and aid the refinery’s operations.

Aliko Dangote, Africa’s richest man and the richest Black individual globally, has experienced a dramatic reduction in his fortune, losing nearly $10 billion in just six months. 

According to the Bloomberg Billionaires Index, Dangote’s fortune —  which surged to a record high of $23.3 billion on Jan. 30, 2024 — has now declined to $13.8 billion.

This downturn, driven by the devaluation of the Nigerian naira and a market pullback on the Nigerian Exchange (NGX), has significantly impacted his financial standing.

Dual financial setback

Aliko Dangote’s wealth took a hit due to a combination of the naira’s devaluation and a recent pullback in the share prices of his publicly listed companies on the NGX.

Over the past six months, his net worth has dropped by $9.5 billion, translating to a year-to-date loss of $1.33 billion, a stark contrast to the $8.17 billion gain he recorded at the start of the year.

The devaluation of the Nigerian naira has been a major contributor to Dangote’s financial woes. The naira has lost more than 53 percent of its value over the past year, following reforms by Nigerian President Bola Tinubu aimed at removing the currency’s long-standing peg.

This devaluation significantly impacted Dangote’s holdings, particularly in Dangote Cement Plc, where his 86 percent stake’s value dropped from $12.4 billion to $5.35 billion.

Challenges in the oil and gas sector

Dangote’s venture into oil and gas, the Dangote Oil Refinery, is facing hurdles. Plans to start petrol production for the Nigerian market in August are delayed due to difficulties in securing crude oil. The refinery is operating at just over half capacity.

To stabilize the situation, President Tinubu has directed the Nigerian National Petroleum Corporation (NNPC) Limited to sell crude to the refinery in naira.

The Nigerian government approved a plan to sell crude oil to the Dangote Refinery in naira to stabilize fuel prices and the dollar-naira exchange rate.

The initiative involves providing 450,000 barrels for domestic use in naira, with Dangote’s refinery as a pilot project.

The refinery requires 15 cargoes of crude annually, costing $13.5 billion, and will initially receive four cargoes from NNPC.

Positive developments in Dangote’s cement business

While the refinery’s struggles highlight the inherent risks of operating in an emerging market, Dangote’s diversified business portfolio is cushioning the impact.

Amid a challenging macroeconomic environment, Dangote Cement Plc, the Nigerian billionaire’s cement behemoth, continues to outperform expectations, expanding its market share across Africa, and solidifying its position as a regional leader.

The company reported a robust 85.1 percent surge in revenue to $1.1 billion in the first half of 2024, driven by increased market activity and improved operational efficiency.