Abdulsamad Rabiu’s $1Bn loss: Another call to strengthen the Naira, by Nze Duru

The vagaries of the financial and stock markets can sometimes be vicious in their manifestations at times. Today, an investor, especially in wealthy stocks, may be riding high on the sentiments or fundamentals of the stock market, but the story may change abruptly the following day. Stock prices may just suddenly take a downward trend, with huge implications for the value of stocks and the investment portfolios of rich investors.

I believe this is the experience AbdulSamad Rabiu, Nigeria’s second richest man and Chairman of BUA Cement and BUA Foods, is going through at the moment. His total net worth has significantly decreased by $1.1 billion over the past 90 days.

According to reports, as of May 6, 2024, Rabiu’s net worth stood at $5.9 billion, but by August 16, 2024, his net worth had dived to $4.8 billion.

This decline in net worth is directly attributed to the value of the national currency, the Naira, relative to other currencies, especially the dollar, which is Nigeria’s preferred convertible currency.

Recall that on May 6, 2024, the naira was exchanged for N1378.51 for a dollar, but by August 16, the naira value had depreciated to N1,579.89. This currency value depreciation often reflects stock market price movements.

The fact of the matter is that there is a correlation between currency depreciation and stock market movements. This is one reason I have continued to advocate for the strengthening of the naira against other currencies. This is for the good of all segments of the country. For those involved in manufacturing, a strong naira makes their imported inputs cheaper; for the stock market, it drives a stronger pricing threshold and for the general population of consumers, it means more affordable goods.

I once again appeal to the authorities of the Central Bank of Nigeria, bank chiefs, investors, and the exclusive circle of the very rich to come together to save the naira. If not for altruistic reasons, at least they should do so to save their wealth and material value standings.