Tony Elumelu’s United Bank of Africa, UBA stake would have witnessed an increase of $16.8 million in market value during the past 38 days if not for the currency devaluation. The naira devaluation which happened on the 14th of June, 2023 when trading restrictions on the official market were lifted caused a $1.1-million decline in Elumelu’s stake,
The development wiped out all the potential gains Elumelu would have recorded. Reports say the Nigerian multi-millionaire witnessed the market value of his UBA stake decline by $16.5 million, plummeting from $57.9 million to $41.4 million between Wednesday, 14th of June, and Friday, 16th of June 2023.
What led to the naira devaluation
The naira devaluation occurred when trading restrictions on the official market were lifted. The removal of trade restrictions resulted in the naira reaching an all-time low of 750 to the dollar. This marked a significant drop from the previous day’s rate of 477 Naira to the dollar.
Before the removal, President Bola Ahmed Tinubu had suspended the Central Bank governor, Godwin Emefiele, expressing concerns over the multiple exchange rates implemented by the bank. According to reports, the varying rates operated by the apex bank had caused a shortage of foreign currency, making it difficult for investors to repatriate funds from Africa’s largest economy.
Other Nigerian billionaires like Aliko Dangote and Abdulsamad Rabiu also felt the heat on their networth. This also spotlights the volatility of the country’s currency and the challenges billionaires with naira-denominated assets face.
Recall that a private equity firm founded by Elumelu, HH Capital, bought 70 million units of shares of United Bank for Africa where he is the chairman of the Board of Directors. The recent acquisition increased Elumelu’s shareholding in the bank.