My Support to Nigeria’s “Poorer” Billionaires

Let me send my words of support(!) to Aliko Dangote and other billionaires as many of them become “poorer”, following the floating, swimming or flying of the Naira: Nigeria giveth, Nigeria taketh; it is all good!  But truth be told, if Nigeria can isolate the vagaries of exchange rate in business, the nation will rise.

“Aliko Dangote, the Chairman of Dangote Group, a leading conglomerate in Africa, is no longer the richest man in Africa, according to Forbes. In a billionaire list updated recently by the Magazine, Dangote lost his long-held position to South African billionaire Johann Rupert, after the wealth of the Nigerian plummeted by a whopping $3.4 billion in a day, following the decision of the Nigerian government to float the naira, the nation’s currency.”

Comment On Feed

Comment 1: I sometimes wonder if billionaires care about these ratings. Once you make a few billion dollars, what is it that one billionaire can do that you can’t?

My Response: Provided they put those in their bios, I will assume they care. There are phases of wealth nonetheless. And yes, the more you are ranked, the easier banks see you as a good risk to give loans. Consider this brief which I will write if I am asked as a banker to raise money for Dangote: 

“This client is Africa’s richest man and the most dominant businessman in sub-Saharan Africa. For more than 20 years, Forbes, Bloomberg, Fortune, and other leading brands have recognized the excellence he has demonstrated in his enterprises. He plans to venture into Sun-Direct Electricity, tapping the inner layers of the sun to power every part of Africa. This  has never been done before and it offers a massive opportunity to fix the energy poverty problem in Africa. 

Our client is looking for $50 billion. Four banks have already committed $35billion and we’re working to close the balance of $15 billion. As Africa’s richest man with a durable position on all the major wealth rankings, we model that his risk is well mitigated. More so, he owns 85% of Dangote Cement and a chunk of other entities within Dangote Group which pay an excess of  $1 billion in dividend yearly meaning that his capacity to service this debt is well contained. Kindly review the attached  investment brief and let me read you in three days -Ndubuisi Ekekwe, Tekedia Capital”

Comment 1R: Ndubuisi, this man. I am just having a laugh here. The funny thing is that it’s actually how the framing always goes, it’s a great risk to lend big amount of money to a poor man, no matter how grand his proposed idea is…

Comment 2: Ndubuisi Ekekwe you earlier said the fortune of the naira will be determined not by CBN monetary policies but by factories and warehouses, and now you are still saying “if Nigeria can isolate the vagaries of exchange rate in business, the nation will rise”. I find it hard to really comprehend your position with this floating of the naira.

My Response: Whether you use factories, warehouses, or financial engineering, the destination is one place: ” isolate the vagaries of exchange rate in business,” You already know how we can get there via production, I do not need to repeat it every day. But the point is clear: you need to stabilize the exchange rate, no matter how you plan to do it. There is nothing I wrote here that should confuse or complicate comprehension. 

Comment 2R: I sincerely understand your point that production is the panacea to redeeming the old glory of the naira. However, one should not dismiss the fact that a good financial engineering is also needed that will give investors confidence and help production in the long term.
There’s been so much arbitrage opportunities with the fixed exchange rate, which should be eliminated and also to give investors confidence that they can repatriate their $$$ when they invest in our economy.
We won’t start building factories over night. It’s a long a and painful process. In the short term, we need good monetary policies.

My Response:  “I sincerely understand your point that production is the panacea to redeeming the old glory of the naira” – great that it is clear now

“However, one should not dismiss the fact that a good financial engineering is also needed” – I have NEVER said that we do not need it. If that is the case, we will close CBN. My point is that besides it, you need to make things since financial engineering since 1985 has NEVER worked for Nigeria. It works, then it fades. Simply, we need to have a long-term manufacturing policy (manufacturing here includes service, making things physical and digital)

Nice comments across the ecosystems on the response I left on the Dangote billionaire article: “I like the investment brief introduction, could you share a sample of an investment brief?” Let me respond generally that I will find a way to “declassify” the sample we use in Tekedia Startup Masterclass, and when done, I will share here. But note that I own a banking institution (Tekedia Capital)  in America, and we help organizations raise $$millions all the time. So, that entry was not a social media response; see it as a banker and expert whose akara, moi moi, nkwobi, etc depend on it.

Register for Tekedia Mini-MBA (Jun 3 - Sep 2, 2024), and join Prof Ndubuisi Ekekwe and our global faculty; click here.