Naira Devaluation: How Aliko Dangote lost $3.2 billion in a day

Aliko Dangote, the richest individual in Africa, experienced a remarkable downturn in his total assets, within a span of just 24 hours, resulting in a substantial reduction of more than $3 billion.

The significant drop in Aliko Dangote’s net worth was directly attributed to the Nigerian currency reaching an all-time low. This occurred as the central bank conducted a dollar auction at a rate nearly 30 percent weaker than the tightly regulated official market rate.

As reported by the Bloomberg Billionaires Index, Dangote’s wealth tumbled from $21 billion on June 14 to $17.8 billion currently, reflecting a staggering loss of $3.2 billion in just 24 hours.

Dangote maintains his status as richest man in Africa

Despite facing this substantial setback, Aliko Dangote, the founder of Dangote Group, retains his status as both the wealthiest individual in Africa and the richest Black billionaire globally. However, his position on the Bloomberg Billionaires Index dropped from 75th to 94th due to the recent decline in his net worth.

Aliko Dangote’s assets, including his 86 percent stake in Dangote Cement, holdings in Dangote Sugar Refinery, and private interests in Dangote Industries, were significantly affected by the devaluation of the Nigerian currency.

The decline in Aliko Dangote’s net worth by $3.2 billion was largely attributed to the impact on his holdings, leading to year-to-date wealth losses amounting to $862 million. The devaluation of the Nigerian currency was initiated by the country’s central bank, which allowed a significant drop of up to 36 percent on the official market.

Back story

President Bola Tinubu took the recent action of suspending Godwin Emefiele, the central bank governor, expressing concerns regarding the implementation of multiple exchange rates by the bank. These exchange rates had resulted in shortages of foreign currency, causing difficulties for investors seeking to repatriate funds from Africa’s largest economy.

On Wednesday, the removal of trading restrictions on the official market led to a historic low for the Nigerian naira, with an exchange rate of 750 naira to the dollar. This marked a significant decrease compared to the previous day’s rate of 477 naira to the dollar.