Effect of exchange rates on performance of Dangote Cement Manufacturing Company

This study is conducted to examine the effect of exchange rates on performance of Dangote cement manufacturing company. The specific objectives are to: (i) determine the effect of exchange rates volatility on return on equity of Dangote cement manufacturing company, and (ii) examine the effect of interest rate on return on equity of Dangote cement manufacturing company. The methods of data analysis range from Argument dickey-fuller unit root test, Johansen co-integration test and finally error correction method. The summary of the findings is: foreign exchange rate has negative significant impact on return on equity output in Nigeria (t – statistics (3.5663) > t0.05 (1.684). foreign exchange rate has 52 percent negative significant impact on return on equity output in Nigeria. A percent change in foreign exchange rate result to 52 percent decrease in return on equity output in Nigeria; Interest rate has negative insignificant impact on return on equity output in Nigeria (t – statistics (-1.2746) < t0.05 (1.684), interest rate has 25 percent negative insignificant impact on return on equity output in Nigeria. A percent change in interest rate result to 25 percent decrease in return on equity output in Nigeria, and Foreign direct investment has positive significant impact on return on equity output in Nigeria (t – statistics (6.0022) > t0.05 (1.684), foreign direct investment has 11 percent positive significant impact on return on equity output in Nigeria. A percent change in foreign direct investment result to 11 percent increase in return on equity output in Nigeria. The study concluded that there is significant effect of exchange rates on performance of Dangote cement manufacturing company. The study recommends that Nigerian monetary authority or CBN should make the monitoring of exchange rate system a priority since it explains high proportion of variation in Nigerian manufacturing output.