Dangote Group Struggles With “Extremely Tight” Forex Supply

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 in an e-mailed response to questions on Wednesday. “But Dangote Cement is already generating income in foreign exchange in Ethiopia, South Africa, Tanzania, Senegal and Cameroon. Further, we are also making financing arrangements through export-credit agencies for the first time.”

About $10 million is sold daily in the official market, aside from the central bank sales, which is too low to meet demand, Razia Khan, Standard Chartered Plc’s chief Africa economist, said in a report on Monday.

The company owned by Africa’s richest man, Aliko Dangote, is seeking to increase sales and protect market share at its cement unit in Nigeria amid weaker demand, while expanding elsewhere in sub-Saharan Africa and Asia.

Edwin said the company will build two new plants in Nigeria within three years that will add nine million metric tons annually, increasing total capacity to 38 million tons.