Aliko Dangote, Africa’s richest man, has announced plans to list approximately 10% of the Dangote Oil Refinery in a $40bn multi-exchange IPO.
The proposed listing is designed to fuel the Dangote Group’s plans to invest $40bn over the next five years in order to increase its urea fertilizer production and expand the Dangote Petroleum Refinery in Lagos. The refinery, one of the most significant industrial projects in Nigeria’s history, began production in 2024. The IPO is seen as part of the group’s “Vision 2030” program, a strategy aimed at establishing the Dangote Group as a $100bn revenue enterprise.
The potential funds have been earmarked for key objectives such as more than doubling the oil refinery’s capacity (from 650,000 barrels per day to 1.4m), quadrupling fertilizer production, setting up potash and phosphate plants in the Democratic Republic of the Congo, and building copper-refining operations in Zambia.
Oyinkansola Aregbesola, a Lagos-based investment professional, says these proposals take on additional significance given the ongoing geopolitical situation caused by the conflict in Iran. The closure of the Strait of Hormuz has impacted the transport of essential fertilizers to the African continent and left Africa’s oil importers exposed to steeply rising oil prices.
“From a revenue perspective, this could strengthen the earnings of the refinery. Being a downstream processor also provides some insulation [for Africa], as regional demand for refined products is stable even when upstream markets are unsettled,” she says.
“On the other hand, a lot of foreign investors are currently in wait-and-see mode as they continue to monitor geopolitical developments before making commitments.”
Dangote has previously revealed plans to float 5% of the oil refinery on the Nigerian Stock Exchange by the end of this year, however the latest proposals involve a broader listing across multiple African exchanges.
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Frank Mwiti, CEO of the Nairobi Securities Exchange, announced last week that he had met with Dangote at his refinery and fertilizer plant in Lagos.
“We discussed how the Nairobi Securities Exchange and other African exchanges can support what could be Africa’s biggest IPO yet,” he said.
Aregbesola notes that “a multi-exchange structure distributes the weight of an offering of this scale across multiple investor pools simultaneously, which makes the transaction more manageable.”
She also says that the refinery’s pledge to pay dividends in US dollars rather than more volatile local currencies could help facilitate participation from foreign investors.
“The dollar dividend structure is an enticing feature for foreign participation. That addresses the currency concern that would otherwise limit serious foreign appetite.”
Should the listing proceed successfully, the symbolic power of a major $40bn IPO taking place within Africa could also prove valuable in driving forward the development of the continent’s capital markets.
“For a long time, any serious African company needing real capital had to look outside the continent. This listing has the potential to mark a turning point, fostering greater market integration and giving retail and institutional investors across Africa a chance to own a stake in one of the continent’s most strategic industrial assets,” Aregbesola says.
“And if the transaction is executed properly, it could become the blueprint any major African company will reference when thinking about going public.”
African Business
