The naira devaluation by the Central Bank of Nigeria (CBN) had an adverse effect on Aliko Dangote’s companies; Dangote Cement and Dangote Sugar.
Prime Business Africa learnt that Dangote Cement and Dangote Sugar lost a combined N184.80 billion to naira devaluation in the second quarter of 2023.
In a statement released by Dangote Cement, the manufacturer reported that the naira devaluation caused the company a net exchange loss of N116.1 billion.
“Net exchange loss on foreign denominated transactions is due to material devaluation of the Nigerian Naira in June 2023.
“The Naira moved from ₦465/$ at end of May 2023 to close at ₦756/$ in June 2023 giving rise to a net exchange loss of ₦116.1 billion from third party loans and payables in the Nigerian entities,” the statement reads.
Also, disclosing the impact of the naira devaluation on its earnings, Dangote Sugar said the decision by the CBN resulted in a revaluation loss of N68.7 billion.
“Monetary Assets and liabilities for the Nigeria operations were revalued at this rate resulting in a revaluation loss of N68.7billion for the Company mainly driven by Letters of Credit and foreign vendor balances.
“This exchange loss has been taken in the month of June. None of the new or revised standards effective 1 January 2023 had a material effect on the Financial statements,” the company disclosed in its second quarter financial statement in 2023.
Recall that the central bank had devalued the naira on 14 June 2023 following the suspension of the governor of CBN, Godwin Emefiele.
Emefiele was suspended by President Bola Tinubu, who said he plans to review the monetary policies under Emefiele in order to strengthen the naira.
After Emefiele’s suspension, the CBN devalued the naira by N192.37 kobo, raising the dollar rate from N471.67/$1 on June 13 to N664.04/$1 on 14 June. Although the exchange rate between both currencies is now N789.08/$1.