A few weeks ago, the Governor of the Central Bank of Nigeria, Godwin
Emefiele, announced a nearly 10% devaluation of the Naira, Nigeria’s
currency, after admitting that a plunge in world oil prices and
dwindling dollar reserves were making it difficult to defend the value
of the currency. The Naira is now trading at N187 to $1, compared to
N165 in November. In dollar terms, the devaluation has knocked more than
$40 billion off the value of Nigeria’s economy.
Dangote is the biggest loser among Nigeria’s richest
people as the Naira’s slump, coupled with falling stock prices, has
erased more than $7.8b of his fortune since Feb, when Forbes locked in
the values for its annual ranking of the World’s Billionaires.
Dangote was worth $25 billion at the time; as of market close on
Tuesday, he’s worth $17.2 billion. More than half of the drop in his
fortune has happened since early November. As of Nov. 7, Dangote was
worth $21.6 billion, $4.4 billion more than now.
Here’s why: The last few weeks have been a bit of a disaster for many
companies listed on the Nigerian Stock Exchange. Several blue-chip
stocks such as Dangote Cement, Zenith Bank, Transcorp and United Bank of
Africa among several others have hit one-year-lows as a result of the
fall in oil prices, a general uncertainty regarding the 2015 general
elections, Central Bank regulatory headwinds, and weak earnings from
large cap companies. These have all contributed toward putting
naira-denominated assets including equities at risk.
After Dangote, the second biggest loser among Nigeria’s ultra-rich is Tony Elumelu,
the Chairman of Heirs Holdings, an investment company. Heirs Holdings,
which is wholly-owned by Elumelu, is the controlling shareholder in
Transcorp, a publicly-listed conglomerate with interests in power
production, hotels and agriculture. Transcorp’s current market
capitalization is now $700 million, down from $1.4 billion at the
beginning of November. Heirs Holdings has lost an estimated $345 million
in paper value on Transcorp, and its stake in the company as at Monday
is now worth roughly $400 million, down from $700 million. Elumelu’s
investments in other listed companies like UBA, Africa Prudential PLC
and UBA Capital have shed a little over $27 million in value.
Other big losers include Nigerian multi-millionaire banker Jim Ovia,
a co-founder of Zenith Bank. The value of his stake in the financial
services provider is $240 million as of late Monday, down from more than
$350 million last month. He owns a 9% stake in the bank