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CHAIRMAN’S STATEMENT vandalism in the Delta. Furthermore, the lack of exports created a shortage of foreign currency that made it difficult for everyone, including Dangote Cement, to source US Dollars to pay for essential imports to support our operations. In June, the Federal Government decided to unpeg the Naira and create a foreign exchange market that to a large extent set the currency’s value. Within weeks the Naira had fallen from ₦198 per Dollar, to more than ₦300 per Dollar. As a result, our costs increased substantially because nearly 60% of our cash costs, including gas, are exposed to fluctuations in the exchange rate against the US Dollar. Costs also came under pressure from Nigeria’s high inflation and from the fact that disruption to the nation’s gas supplies forced us to use unprecedented quantities of expensive LPFO as a back-up fuel. Against such cost pressures, we took action to protect our margins and in early September we increased our ex-factory prices, as we had previously indicated we would. Accounting for inflation, that increase returned pricing to just a little higher than where it was in August 2015, before the price cut that stimulated so much of our volume growth in late 2015 and much of 2016. The combination of the price increase, fuel shortages, economic and seasonal factors in Nigeria led to a slowing of sales in the last four months of the year and, having sold almost 8.8Mt in the first half of 2016, we ended the year selling nearly 14.8Mt within Nigeria. However, because of the higher pricing and more favourable fuel mix, margins recovered very strongly in Nigeria in the final quarter, which bodes well for 2017. Across the rest of Africa we increased cement volumes by 54.0%% to more than 8.6Mt, including a maiden contribution from Tanzania, which quickly made an impact in its market. This was a commendable result in the face of many challenges across the region, including economic downturns in South Africa and Zambia, as well as civil unrest in Ethiopia. Against these challenges, we performed very well across the continent, with all our operations increasing sales and gaining market share to strengthen our position as the leading cement manufacturer in SubSaharan Africa. As a result, Pan-African operations contributed ₦195.0B to Group revenues, or 31.4%, (excl. eliminations) up 88.5% on 2015. EBITDA was ₦26.5B, making up 9.9% of Group EBITDA (excluding central costs). 10 Annual Report 2016

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