Dangote Group Loses N50billion To New Flexible Exchange Policy

One of Nigeria’s biggest conglomerates, Dangote Group, over the weekend revealed that it lost a staggering N50 billion to the new flexible foreign exchange policy launched by the Central Bank of Nigeria, CBN.

President of the Group, Aliko Dangote, revealed this when Vice President Yemi Osinbajo toured the project sites of Dangote Fertilizer and Dangote Refinery in Lekki, Lagos.

The business mogul said the $161 million his companies bought during that period from the CBN merely reflected the size of his business and did not represent preferential treatment.

“We have been badly affected like any other company,” he said, adding that operational costs totalled $100 million each month due to recurring expenses, such as the purchase of parts for cement production and running a fleet of 9,000 trucks.

Dangote said:“When you are talking about 20 billion dollars worth of projects, what is 161 million? One-hundred-and-sixty-one million dollars is what I need in just six weeks.”

“This week (last week), the Central Bank removed the peg that has held the naira at the official rate of 197 for the last 16 months, leading to a 30 per cent devaluation as the currency traded freely on the interbank market.”

Dangote said the decline had pushed up costs. “This devaluation alone, we have lost over 50 billion naira ($176 million),” he said.

“The gas, which is our main source of power, is priced in dollars. If there is 40 per cent devaluation, your price will go up by 40 per cent. Every single aspect of the production will go up by that percentage,” he said.

Meanwhile, Osinbajo said the Dangote Fertiliser and Petrochemical projects are capable of assisting in the government’s drive to reduce poverty through generation of foreign exchange.

He said it was also in line with the Federal Government’s immediate objective of diversifying the economic base of the country as a result of the plummeting of the price of oil, the country’s sole foreign exchange earner.