The Chairman of Dangote Industries Limited, Aliko Dangote has described the floating of naira by President Bola Tinubu’s administration as the biggest mess that affected his company and other business owners in 2023.
Floating the naira allows market forces to determine its value in relation to other currencies.
Dangote said this on Tuesday during his remarks at the Annual General Meeting of Dangote Sugar Refinery Plc, adding that many businesses were affected by the policy.
Dangote said several manufacturing enterprises were impacted and suffered operational losses due to variations in the naira's value against the US dollar.
He said, “The biggest mess created was the devaluation of the naira from N460 to N1,400.
“You can see that almost 97 per cent of companies in the food and beverage business, none of them will pay dividends this year. But we will try and get out of it.”
Shortly after Tinubu implemented the policy, the country’s prominent billionaires, Dangote and Abdulsamad Rabiu, who were listed among the 500 world’s richest men, both lost $5.85 billion.
Data available on the Bloomberg Billionaire Index, BBI, a daily ranking of the World’s richest people portal as of June 15, 2023, showed negative changes in the calculations of the wealth of the Nigerian businessmen.
A Bloomberg report in April noted that Nigeria was burning through its foreign exchange reserves at a rate not seen in four years.
This situation raised concerns that the central bank was depleting its dollar holdings to support the naira after pledging it would allow the currency to float more freely.
Liquid reserves declined 5.6% since March 18, when the naira started its rebound from record-low levels against the dollar, to $31.7 billion as of April 12, according to Bloomberg’s calculations based on the latest available data from the Central Bank of Nigeria.
The CBN Governor, Olayemi Cardoso, however, said the shift in the reserve was found in “any country’s reserves situation, where for example, debts are due and certain payments need to be made, and they are made because that is also part of keeping your credibility intact.”
