Naira, stocks crash: Nigeria’s economy loses $40bn in value
by Hamisu Muhammad
The devaluation of naira by nearly 10% after a plunge in world oil prices and dwindling dollar reserves has knocked more than $40 billion off the value of Nigeria’s economy, Forbes magazine has reported.But the Federal Government said it is not unmindful of the implications of the recent devaluation of the naira, which now trades N187 to $1.
In the Forbes report, Africa’s richest man Aliko Dangote reportedly lost more than $7.8bn since February to the devaluation and falling stock prices.
“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”, it said.
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.
Jim Ovia is a co-founder of Zenith Bank. 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.
But Paul Nwabuikwu, the Special Adviser to the Minister of Finance, said yesterday in Abuja that the ministry was aware that the economy is facing challenges because of the drop in oil prices and related consequences.
“Many other commodity based economies are facing similar challenges. What is important is that the Jonathan administration is managing the situation in a proactive way to reduce the impact on ordinary Nigerians”, he said.
According to him, that is why, for example, prices of many food items in major markets across the country are either stable or even falling even at this festive period because of increased food production.
He said the government’s diversification effort to reduce the country’s dependence on oil is also paying dividends as the collection of tax over its normal target is close to N75billion this year. A new target of about $3 billion has been set for the next three years in an effort to consolidate the post-oil economy.