Dangote Asserts That the Greatest Chaos in 2023 Was the Devaluation of the Naira from N460 to N1,400 in Nigeria

Floating the naira, a policy initiated by President Bola Tinubu's administration, allows market forces rather than government interventions to determine the currency's value against others. 

This economic decision, while praised for its aim towards a more open and market-driven economy, has been criticized by significant business leaders, including Aliko Dangote, the Chairman of Dangote Industries Limited.

During the Annual General Meeting of Dangote Sugar Refinery Plc, Dangote expressed his concerns about the policy's repercussions on the Nigerian business landscape. He pointed out that the abrupt devaluation of the naira from N460 to N1,400 had profound effects, particularly on manufacturing sectors. This devaluation led to operational losses across various industries due to the erratic fluctuations in the exchange rate against the US dollar.

"The biggest mess created was the devaluation of the naira," Dangote stated, emphasizing the scale of impact it had. "You can see that almost 97 per cent of companies in the food and beverage sector are unlikely to pay dividends this year. But we will try and get out of it."

The consequences of this policy extended beyond operational challenges. Shortly after its implementation, notable Nigerian billionaires, including Dangote and Abdulsamad Rabiu, saw significant reductions in their wealth. According to the Bloomberg Billionaire Index, both figures collectively lost $5.85 billion, reflecting the immediate economic impact of the naira's depreciation.

Furthermore, a Bloomberg report highlighted concerns over Nigeria's management of its foreign exchange reserves. The country had been using its reserves at a rate not observed in the last four years, ostensibly to support the naira amidst its decline. This led to a 5.6% decrease in liquid reserves since March 18, as the naira attempted to recover from record-low levels against the dollar, leaving the reserves at $31.7 billion by April 12.

In defense of these policies, CBN Governor Olayemi Cardoso explained the fluctuations in the reserve levels as typical for any nation managing its debts and maintaining credibility in the international financial landscape. According to Cardoso, such financial moves are necessary to uphold the country's economic standing and fulfill international obligations, emphasizing the broader context of maintaining national fiscal health amidst challenging conditions.