What’s the fuss on Dangote gaining from Nigeria currency squeeze?

 

By Emeka Chiakwelu

An international currency trader asked my opinion on Dangote gaining from
the “Nigerian currency squeeze”. My answer was short and direct: I’m cool
with it.
For those who are not aware, Reuters News agency wrote a piece titled,
“African richest man got a fistful of dollars from Nigerian currency
squeeze.”

The piece rolls like this:

“As Nigeria grapples with a foreign exchange crisis, one person stands out
in the scramble to obtain hard currency: Aliko Dangote, Africa’s richest
man. When the government restricted the supply of dollars in June 2015 to
prop up the value of the Nigerian naira, firms owned by Dangote landed a
healthy share of dollars available at the cheap official rate, a study by
Reuters shows.”

Then it continues,

“Reuters examined foreign currency transactions made during an 11-week
period in March to May this year. Over that time, Dangote businesses were
able to buy at least $161 million in hard currency from the central bank.
That was around nine percent of all the hard currency the bank sold over
the period. In a single week in March, one dollar in every eight went to
Dangote companies. There is not enough data to see how that stacks up with
the companies’ share of foreign trade.”

Finally Reuters made its punch line by delineating and emphasizing
Dangote’s gain:
“Compared with buying dollars on the more expensive unofficial market,
though, Dangote companies benefited to the tune of about $100 million.”
But I disagreed, from a capitalistic and free market perspective, nothing
was wrong with Dangote’s currency transaction. Businesses and corporations
are supposed to look after the best interest of their entities and
shareholders. Dangote did not break any law, the said transaction was
legal and within the scope of the given rules and regulations.
Dangote invested heavily in Nigeria and Africa, providing jobs to the
youths and thousands of unemployed Nigerians. He is part of the solution
and I wish many of our business men and women would emulate his
investments traits. Many are busy siphoning their wealth and resources to
foreign lands but Dangote chose to invest in Africa and Nigeria in
particular. For that he deserves some preferences and recognition for
doing well. Dangote’s corporate responsibility has benefited many
Nigerians and that outweighs any pothole.

Emeka Chiakwelu, Principal Policy Strategist at AFRIPOL. His works have
appeared in Wall Street Journal, Huffington Post, Forbes and many other
important journals around the world. His writings have also been cited in
many economic books, publications and many institutions of higher learning
including tagteam Harvard Education. Africa Political & Economic Strategic
Center (AFRIPOL) is foremost a public policy center whose fundamental
objective is to broaden the parameters of public policy debates in Africa.
To advocate, promote and encourage free enterprise, democracy, sustainable
green environment, human rights, conflict resolutions, transparency and
probity in Africa. info@afripol.org http://www.afripol.org

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