Aliko Dangote Falls to Second Place as Africa’s Richest Man After Losing $1 Billion

South African billionaire Johan Rupert, chairman of the luxury goods conglomerate Richemont, has reclaimed his position as Africa’s richest man. Rupert’s rise to the top comes after Nigerian industrialist, Aliko Dangote, owner of the Dangote Group, experienced a significant decline in net worth, losing over $1 billion.

According to the latest figures from the Bloomberg Billionaires Index, Rupert’s net worth has surged to $14.3 billion, overtaking Dangote, whose net worth has dropped to $13.4 billion. This year, Rupert has seen his wealth increase by $1.87 billion, while Dangote’s fortune has shrunk by approximately $1.69 billion.

The primary factor behind Dangote’s financial setback is Nigeria’s challenging macroeconomic environment, where his conglomerate operates extensively. The Dangote Group has faced multiple hurdles, including production delays at its refinery and significant depreciation of the Nigerian naira. The weakening of the naira has had a substantial impact on Dangote’s wealth, which is heavily tied to naira-denominated assets.

Just two weeks ago, Dangote was ranked as the 145th richest person globally by Bloomberg, but he has since fallen to the 160th position. Last year, Rupert briefly held the title of Africa’s richest man, as Forbes ranked him above Dangote following a major devaluation of the naira. The currency’s instability has continued to affect Dangote’s fortune, making it one of Africa’s worst-performing currencies this year.

Since President Bola Tinubu took office and implemented policies such as partially removing fuel subsidy and easing currency controls to attract foreign investment, the naira has depreciated by about 70 per cent. This steep decline has significantly eroded Aliko Dangote’s net asset value.

In 2023, Dangote Industries Limited reported a substantial foreign exchange loss of $1.07 billion. The company is also grappling with supply chain issues at its Nigerian refinery and a recent downgrade by Fitch Ratings. Despite these setbacks, the Dangote Group remains optimistic, aiming to generate roughly $30 billion in revenue by 2025 and expand its presence in the foreign exchange market.

Aliko Dangote has outlined strategic plans to reduce the group’s dependence on the Central Bank of Nigeria for currency supply and diversify its revenue sources. He also intends to reduce his stake in the cement business from 75 per cent to 15 per cent and balance the group’s earnings with a 50 per cent contribution from foreign markets.

By 2025, the Dangote Group aims for 90 per cent of its revenue to come from foreign exchange earnings, highlighting its commitment to international expansion amid Nigeria’s ongoing economic challenges.