* The impact of Tinubu’s economic policies
Africa’s richest man – Nigeria’s Aliko Dangote – has experienced a significant decline in wealth, dropping out of the list of the world’s top 100 billionaires within a short period of 24 hours.
This comes in the wake of a staggering loss of $5.4 billion (N7 trillion) on Thursday, February 1, 2024.
Dangote, who – until the adversity – held the 81st position, plummeted to the 113th spot on the global billionaires ranking. The decline in his net worth is attributed to the devaluation of the Naira by the government and a substantial loss suffered by the Nigerian Exchange Limited (NGX) after a bullish run lasting two weeks.
Top 10 Richest Men in Africa 2024 (Full List) Data from the Bloomberg Billionaire Index indicates that Dangote’s wealth shrunk from $22 billion to $16.6 billion within the 24-hour period.
The crash in his net worth is seen as a direct consequence of the recent devaluation of the naira by the Nigerian government, marking the second devaluation in eight months.
In January, Dangote experienced a significant surge in wealth, gaining $7.11 billion due to the remarkable performance of Dangote Cement, which emerged as Nigeria’s most capitalized company with a valuation of N13 trillion.
The recent devaluation of the naira is viewed as part of President Bola Tinubu’s market-friendly reforms to stabilize the exchange rate and attract foreign investors.
The shift in the official exchange rate from N900 to approximately N1,500 per dollar contributed to the downward trend in Dangote’s wealth.
Additionally, Femi Otedola’s substantial investment in Dangote Cement shares further fueled the rise in the company’s stock price. Otedola’s acquisition of around N5 billion worth of shares elevated the share price from N380 per share to N694.
This marks the second substantial loss for Dangote within eight months, with the first occurring in June 2023 during the initial currency reforms by the Nigerian government.
At that time, he reportedly lost over $6 billion, witnessing a decline in wealth from $21 billion to $15 billion.
The impact of the naira’s depreciation extends beyond Dangote, affecting other prominent Nigerian billionaires like Abdul Samad Rabiu of BUA Group and Mike Adenuga of Globacom, who also incurred substantial losses.
Despite the recent setbacks, Dangote remains a formidable figure in the business landscape, and the fluctuations in his wealth underscore the inherent volatility in the global economic environment.