Dangote launches oil refinery ‘people’s IPO’, Africa’s biggest

Nigerian businessman Aliko Dangote has launched Africa's biggest share sale through the initial public offering (IPO) of his oil refinery. The IPO aims to raise up to $2.1 billion for expansion, marketed as a "people's IPO" offering ordinary Nigerians a chance to invest in the plant's success. The refinery has gained traction due to supply disruptions caused by the Iran war, leading to increased demand for its products and successful jet fuel exports to Western European countries.

Dangote's goal is to "democratise wealth creation," but retail investors will face a higher price compared to institutional investors who participated in a July private placement, raising $2.5 billion for a 6% stake. The valuation of the company increased from $40 billion to an estimated $49 billion following the IPO, according to the company's prospectus.

The company's CEO, David Bird, explained that the private placement discount was due to certain conditions, including a lockup period, agreed upon by institutional investors. Potential investors can purchase as few as 10 shares on digital investment platforms, with a minimum investment amount of approximately $4 – a relatively low threshold compared to other IPOs in Nigeria. In 2021, telecoms firm MTN Nigeria's retail offer had a minimum investment of around $8.

The refinery, built at a cost of about $20 billion on the outskirts of Lagos, has revolutionized Nigeria's fuel market since commencing operations in 2024. It processes 700,000 barrels of crude daily, with plans to increase production to 1.4 million barrels by 2029. Renaissance Capital Africa analysts stated that the refinery has transformed Nigeria's economy from a net petroleum importer to a net exporter, making it a crucial institution for the nation.