• Monday, February 26, 2024
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BusinessDay

Nigerian House Chair says raid on Dangote will hurt economy

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A raid by Nigerian anti-graft officials on the offices of Dangote Industries Ltd, controlled by billionaire Aliko Dangote, will harm the economy and deter investors, according to the chairman of an influential panel in the country’s parliament.

“The raid on Dangote Group is not only very suspicious, but most importantly capable of worsening the economic situation and scaring investors,” said Ikenga Ikeagwuonu, who heads a committee on petroleum resources in Nigeria’s House of Representatives. “What will the international community think of Nigeria when they read about news like this?”

Officers from the Economic and Financial Crimes Commission visited the Lagos headquarters of Africa’s richest person on Thursday.

An official from the EFCC, who spoke on the condition of not being identified, said the visit was part of an ongoing probe into Godwin Emefiele, the former head of the country’s central bank.

Officials at Dangote did not respond to repeated requests for comment.

Ikeagwuonu pledged to raise the issue when lawmakers reconvene next week.
“Given our current fragile economic situation, I believe this move by the EFCC will worsen things,” he said. “Now is not time.”

The EFCC is investigating foreign-exchange dealings with the central bank under Emefiele, who was arrested in June on charges including fraud. He has denied wrongdoing.

Dangote Cement Plc, the most valuable firm in the Dangote Group, jumped 1.6% on Friday in Lagos with trading volumes more than triple the 20-day average. Still, the share price advance was less than the 2.1% gain by the main index. Nigeria dollar bonds maturing 2049 declined for fifth consecutive day to 86.474 cents on the dollar, the lowest since Dec. 13.

From 2015 until it was scrapped in June, the central bank under Emefiele’s leadership operated a complex foreign-exchange regime designed to shore up the naira by limiting the amount of dollars available from official sources.

While propping up the value of the Nigerian currency on the official market, it also gave rise to lucrative trading opportunities to those able to access dollars at the official rate and then sell them in the unofficial market, where the naira was much weaker.

President Bola Tinubu, who took office in May, quickly halted the widely-criticised practice, dismissed Emefiele and subsequently opened the probe into the central bank under his watch.