Africa’s richest man, Alhaji Aliko Dangote, has reportedly laid off about 36 foreign senior managers as part of a cost-cutting exercise within his Dangote Industries, a sign that the Nigerian economic recession is takeing its toll on the company.
Since the start of this year, Nigeria’s economy has been in recession, recording negative growth rates during the first two quarters of 2016. Affected by the downturn, Dangote Industries has had to make cutbacks and had subsequently made redundant 48 senior members of staff, including 36 expatriate and 12 Nigerians at its headquarters and one of its subsidiaries Dangote Cement.
There are indications that the huge amounts in foreign currencies being paid to the expatriate workers is now a burden on Dangote Industries due to the rampant depreciation in the value of the naira and the difficulties of raising enough dollars. Consequently, Alhaji Dangote decided to replace the expatriates with Nigerians, who have acquired the requisite experience on the job, as paying them in naira will be less problematic.
For the affected Nigerians, most of them had disciplinary issues, which made it easy for the group to do away with their services. In a letter signed by Aliko Dangote, the firm stated that it was constrained to take the tough decision as economic factors had affected the cost of production.
It read in part, “This year has been a very challenging year for us as a business. The unavailability of foreign exchange coupled with an unprecedented hike in the exchange rate has resulted in increased costs across the organisation.
“This called for a proper review and adjustment of our costs across board to ensure efficiency and effectiveness in the deployment of our factors of production in a bid to eliminate redundancies that we know exist, which resulted in some tough decisions, which means losing staff, including some of our colleagues. On Friday, October 14, 2016, we began the process of staff cutbacks as it is imperative to review our human capital deployment for the required cutbacks that would ensure efficiency and eliminate redundancies in the allocation of human resources.”
According to the latest Billionaire Index as reported by Bloomberg, Dangote had lost $5.4bn of his fortune this year due to the fall in the value of the naira and the decision of the Central Bank of Nigeria to ration dollars to stem huge capital outflows in the wake of Nigeria’s worst economic crisis.
Dangote recently urged the federal government to sell off the Nigerian Liquefied Natural Gas Company and other dormant but high capital-intensive enterprises and reinvest the proceeds in the economy to bring the country out of the current economic recession before the end of the fourth quarter.
