- The raid conducted by Nigeria’s anti-graft commission on Dangote’s office on January 4 is sending chills across the boardrooms of businesses in the country.
- Manufacturers in Nigeria express concern that if such an event can happen to Dangote, Africa’s richest man, then it could happen to any one of them.
- The raid is believed to be part of an extensive probe into Dangote, a former Central Bank governor, and the foreign exchange transactions that he oversaw.
A raid conducted by anti-graft agents on the offices of Aliko Dangote on January 4 is sending chills across the boardrooms of businesses and investors in Nigeria, even though sector players were anticipating it.
Dangote, arguably the richest person in Africa by far, owns an empire that controls the Nigerian corporate world and is the former head of Nigeria’s Central Bank.
In May 2023, Dangote completed a massive oil refinery with considerable fanfare, just days before President Bola Tinubu, who had just been elected, assumed office.
Tinubu absence from Dangote refinery launch raises eyebrows
For keen observers, Tinubu himself was surprisingly absent among the dignitaries in attendance, who included outgoing President Muhammadu Buhari and other regional Heads of State, despite the revolutionary role Abuja expects the refinery to play in reducing its reliance on expensive imports.
Analysts agree that the state of affairs seemed unusual at the time, but now it could be a pointer to potential chillier relations with the country’s new leadership.
The raid is believed to be part of an extensive probe of the former Central Bank governor and, by extension, the foreign exchange transactions he oversaw. Nigeria’s Economic and Financial Crimes Commission (EFCC), however, has not yet made any public remarks on the raid.
On the other hand, the Dangote Group issued a statement claiming that it has not been accused of any wrongdoing and referring to the situation as an “unwarranted embarrassment” after news of the appearance of EFCC officers in colorful clothing at its Lagos headquarters were published in the local media.
The Group refrained from providing any additional notes even as Dangote remained quiet in public. However, investors in Nigeria appear ruffled.
Read also: Dangote Refinery breaks ground, set to process one million barrels in debut
Investors in Nigeria concerned about Dangote office raid
In response to the developments, the Director-General of the Manufacturers Association of Nigeria, Segun Ajayi-Kadir, stated, “Manufacturers are concerned that if this can happen to Dangote, it can happen to any one of them.” “They are concerned.”
The Association denounced the EFCC for its aggressive tactics, saying that over 50 companies’ currency allocations were being examined and warned of the potential for a depressing effect on the ailing economy.
“This news has gone around the world and many, including would-be investors, would be taken aback,” Ajayi-Kadir added in a subsequent statement.
“Perhaps this isn’t the greatest approach to demonstrate Nigeria’s dedication to sound corporate governance.”
For instance, the association notes that last week’s seven-day decline in Nigerian dollar bonds maturing in 2025, which is the longest losing run since September, has brought the bond’s value to its lowest point since November 28, suggesting that investors are keeping an eye on what can happen next.
Dangote’s US$18 billion refinery focus of anti-graft probe
The $18.5 billion refinery, constructed by Dangote, is anticipated to be the main focus of the anti-graft agents. The refinery was given limited access to dollars by the central bank to assist in purchasing necessary equipment.
“It’s basically a signal to the business community that this government will go after anyone who they perceive may have the means to help fill the dollar gap in the government’s coffers,” notes Cheta Nwanze of the Lagos-based strategic consultancy SBM Intelligence.
It was also an obvious display of authority to investors in Nigeria. After Tinubu pledged to “remove any clog hindering our path to making Nigeria a destination of choice for local and foreign investments” in his New Year’s Day speech, this happened.
The central bank was governed by Godwin Emefiele from 2014 until his ousting in June. The EFCC broke into Dangote’s HQ three days later, setting off a mad dash across Nigerian boardrooms to examine their dealings with the industry watchdog.
The priority sectors of the economy received preferential access to US dollars from 2015 to 2023, as investors were well aware, according to Charles Robertson, head of macro strategy at FIM Partners UK Ltd. “Yes, the raids do indicate the CBN’s shift in focus.”
Capital inflows in Nigeria drop to US$655 million
Investors appear unconvinced thus far. According to figures released during the week by Nigeria’s National Bureau of Statistics showing total capital inflows decreased 44 per cent to $655 million in the third quarter of 2023 from $1.16 billion a year earlier.
The manufacturers association issued a warning, stating that opinions on the nation’s regard for the business community “may have a great impact” due to the way the anti-graft officials handled the case.
“It’s not that any company is above investigation; rather, it’s about the appropriateness of the method and the sheer brigandage we witnessed,” the statement read.
“The question is whether dozens of security personnel will need to use force to seize documents from a company as well-organized and easily recognized as Dangote Industries Ltd.”
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