Dangote Group President Aliko Dangote said at the weekend that his company lost N50 billion to the flexible foreign exchange policy.
The Central Bank of Nigeria (CBN) last week scrapped the dual exchange rate policy, creating a single window for the trade in naira.
Dangote spoke when Vice President Yemi Osinbajo toured the project sites of Dangote Fertiliser and Dangote Refinery in Lekki, Lagos.
Dangote 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, arguing 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.
“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,” he said.
“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.
To Osinbajo, 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.