Dangote Group, Nigeria’s largest company, is struggling with a constricted supply of foreign-exchange in the West African country and is relying on its international cement operations and export-credit agencies to get around the shortage.
“The forex situation is extremely tight in Nigeria,” group executive director Devakumar Edwin said on Wednesday. “But Dangote Cement is already generating income in foreign exchange in Ethiopia, SA, Tanzania, Senegal and Cameroon. Further, we are also making financing arrangements through export-credit agencies for the first time.”
The central bank in Africa’s top crude producer has pegged the naira at 197-199 to the dollar since March 2015 to stem its slide amid a rout in oil prices. The policy has led to a shortage of foreign-exchange and been widely criticised by investors and businesses, who blame the restrictions for compounding the country’s economic slump. Growth was 3% last year, the slowest pace since 1999, according to the International Monetary Fund (IMF).
The company owned by Africa’s richest man, Aliko Dangote, is seeking to grow sales and protect market share at its cement unit in Nigeria amid weaker demand, while expanding elsewhere in sub-Saharan Africa and Asia. Mr Edwin said the company would build two new plants in Nigeria within three years that would add 9-million metric tonnes annually, increasing total capacity to 38-million tonnes.
Dangote Cement had also received all regulatory approvals to start building a 3-million tonne plant in Nepal, Mr Edwin said.
“We are checking the impact of the altitude on the capacity,” he said. “Ethiopia is a 3-million tonne per annum plant but can deliver only 2.5-million tonnes due to the altitude. It is the only plant outside Africa which has been announced by us.”