Support Dangote refinery to reduce petrol scarcity, ex-NDIC MD tells regulators

• Dangote lost $651m amid sell-offs in Dangote Cement 

Former Managing Director of the Nigeria Deposit Insurance Corporation (NDIC), Umaru Ibrahim, has said supporting Dangote Refinery is crucial to mitigate the negative consequences of fuel scarcity.

However, Ibrahim who spoke at the 2024 Mid-Year Enterprise Risk Management (ERM) Conference organised by the Association of Enterprise Risk Management Professionals (AERMP) in Lagos, urged regulators to exercise caution to prevent risks to the public and support Dangote refinery from operating optimally, adding that fuel queues had reappeared in Lagos, a development he described as a bad sign.
   
“I expect the regulator to exercise more caution even if the regulator has all the facts. Regulators should not take actions that could harm or de-market the institutions they regulate.”

Ibrahim advised regulators to engage in self-regulation to maintain credibility and relevance while adopting measures against risks.
   
According to the former NDIC MD, there is a need for accountability among regulators and collaboration among the banking and financial services sectors, media, legislature, and professional bodies.
   
This is just as Aliko Dangote, Africa’s richest man, saw his wealth valuation dip significantly in dollar terms amid the naira devaluation and recent sell-offs in Dangote Cement. The Kano-born billionaire lost $651 million on Friday and is down by $1.3 billion this year.   

The NGX data on Friday showed that investors reduced their exposure to Nigeria’s most valuable company despite its impressive performance based on its latest earning results.
   
Dangote Cement is almost on pace to surpass its turnover for the previous year, having already topped its total revenue for 2022 with N1.8 trillion in the first half of this year.
   
Data from Dangote Cement’s most recent earnings report indicate that the business benefited from early-year gains in cement prices in Nigeria, which allowed it to sell a ton of clinker at an average price of N127,614, up from N71,766 a year earlier.
   
However, fuel and electricity alone account for over half of direct expenses, and year-over-year increases of 138.7% were observed. In comparison to N113.3 billion during the same time last year, the corporation experienced a net foreign exchange loss of N201.3 billion.
   
The top cement manufacturer, with total assets valued at N5.4 trillion, had its market capitalization drop to N10 trillion on Friday from N11.2 trillion on Thursday.