Africa’s retail-investing boom is running into an infrastructure problem
The Dangote IPO shows how digital platforms are expanding retail investing in Africa, while exposing the infrastructure and cross-border hurdles that remain.
A Zimbabwean investor interested in purchasing shares in Dangote Refinery's $1.6 billion IPO cannot directly invest through an app. The offer is targeted primarily at Nigerian investors, leaving Zimbabweans with limited direct access. Bard Santner Investors (BSI), a local asset manager, has established a cross-border route for Zimbabweans to participate, but it requires regulatory approvals, fund processing, and nominee arrangements facilitated by Ecobank.
When the IPO opened on September 14, digital platforms like Bamboo and Cowrywise faced challenges due to surging traffic. Bamboo experienced delays, having prepared capacity for up to 10 times normal traffic, while Cowrywise was slow for about an hour before recovering. Zimbabwean investors face additional hurdles, such as manual approvals, cross-border bank transfers, and nominee arrangements.
Ngoni Chikowore, head of asset management at BSI, stated that the transaction is treated as an offshore investment, necessitating exchange-control approval and supporting documentation.
The IPO is aimed at African investors and comprises 4.1 billion shares priced at ₦525 ($0.40) each. BSI's minimum investment is $20,000, reflecting its route for eligible African investors, higher than the smaller minimum for domestic Nigerian applicants. BSI's process, while functional, still relies on intermediaries, regulatory processes, and bank transfers. Nonetheless, the IPO highlights the growing importance of digital investment and the need for robust infrastructure to support its expansion.
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