According to the Bloomberg Billionaires Index, a daily ranking of the world’s richest people, on Tuesday, Africa’s richest man, Aliko Dangote, fell 25 places on the index after his fortune dropped by $3.7 billion. This comes on the second day of the Central Bank’s new exchange rate regime. Prior to the commencement of this policy, which took effect on Monday, Dangote was at number 46 on this index but by the close of business on Tuesday, he had fallen to number 71.
Last week, the Central Bank of Nigeria (CBN) announced a new foreign exchange policy regime, which became effective on Monday. The CBN decided to allow the Naira float freely after years of successive pegging by the government and CBN governors. This means that the exchange rate is going to be determined by the forces of demand and supply. On the first day of trading, the Naira depreciated to N281/$1 at the interbank market. This also affected the Nigerian stock market, which recorded a loss of N164 billion. The market capitalisation of the Nigerian Stock Exchange dropped from N10.045 trillion to N9.881 trillion.
Unfortunately, Dangote Cement Plc. was among the losers that day. The company lost about 2 percent in trading on that first day, which also affected Aliko Dangote as his wealth is derived from a 91 percent stake in the cement company. On Friday last week, Dangote Cement’s stock closed at N183.81 per share but closed at N179.99 on Monday. The Nigerian Stock market also appreciated yesterday to N10.1trn and, in the process, Dangote also gained. Dangote Cement Plc. closed its stock at N185 per share as of Tuesday but on the Bloomberg Billionaire Index, Dangote’s rank dropped from 71 to 80.
It is worthy to note that Dangote’s rank on the list fell because the asset of billionaires on the index is measured in US dollars. Also, his rank on that list depends on the value of the Naira on the day of evaluation, in addition to the value of the currency of his competitors on the list. In real terms, if you calculate Dangote’s worth in Naira, he has barely lost anything in business transactions and could see his fortunes increase if the Naira appreciates. Dangote’s rank on the list is expected to increase by the end of today as the stock of Dangote Cement Plc. is expected to close at around N190 per share.
