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| Dangote Group Companies Lose Over N1.21 Trillion in Market Capitalization in July 2024 Image credit: Leadership News |
Substantial Market Cap Losses for Dangote Subsidiaries
Companies under the Dangote Group, including Dangote Cement, Dangote Sugar Refinery, and NASCON Allied Industries, faced a significant downturn in July 2024. The market capitalization of these subsidiaries collectively dropped by about N1.21 trillion, as each experienced a double-digit decline in share prices during the month.
Detailed Market Performance
Dangote Cement saw its market cap fall by N1.12 trillion, closing the month at N10.07 trillion, down from N11.19 trillion. Dangote Sugar Refinery's market cap decreased by N71.06 billion, from N522.32 billion to N451.26 billion. NASCON Allied Industries, a salt maker, recorded a N19.7 billion drop in market cap, moving from N93.2 billion to N79.7 billion.
Broader Market Context
The overall Nigerian Exchange (NGX) also experienced a decline in July, falling by 2.28%. This resulted in a reduction of market capitalization by N1.09 trillion, from N56.602 trillion at the beginning of the month to N55.514 trillion by the end.
Financial Impact on Aliko Dangote
The decline in market capitalization significantly impacted Aliko Dangote, Africa’s richest man. Dangote, who owns substantial stakes in these companies (86% in Dangote Cement, 72.2% in Dangote Sugar Refinery, and 62.19% in NASCON), saw his personal fortune decrease by approximately N1.02 trillion (~$680 million). His net worth dropped from about $14.8 billion on July 1, 2024, to $13.6 billion at the month's end.
Private Assets and Controversies
Despite these losses, Dangote's private assets, such as the Dangote fertilizer plant, remain valuable, estimated at $5.1 billion. The valuation of the Dangote Refinery is currently uncertain due to ongoing controversies. In July, Dangote faced a significant conflict with Nigerian regulators, which exacerbated the financial challenges.
Dangote's Conflict with Nigerian Authorities
The sharp decline in the market value of Dangote's assets was influenced not only by the poor financial performance of Dangote Sugar and NASCON in the first half of 2024 but also by a conflict with Nigerian regulators. In late June, Dangote's Vice President of Oil and Gas accused International Oil Companies (IOCs) of undermining the refinery, a claim refuted by the CEO of the Nigerian Upstream Regulatory Commission (NUPRC). The tension escalated on July 14, when Dangote highlighted a reduction in NNPC's stake from 20% to 7.2%, prompting the CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to accuse the Dangote Refinery of supplying substandard diesel.
Conclusion
The market downturn for Dangote Group companies in July 2024 reflects a combination of poor financial performance and regulatory conflicts, leading to significant losses in market capitalization and impacting Aliko Dangote’s net worth. As the situation develops, the future of Dangote’s investments, particularly the Dangote Refinery, remains uncertain amidst ongoing disputes.
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