Lagos (AFP) – Nigerian billionaire Aliko Dangote on Monday launched what is slated to be Africa’s biggest initial public offering (IPO), aiming to raise $1.6 billion to partly expand his mega oil refinery into the world’s largest. The Lagos-based refinery, which began operations in 2024, has a capacity of 700,000 barrels per day, exceeding domestic demand in Nigeria, Africa’s most populous country. It began exporting its fuel abroad a few months ago and has become the largest supplier of jet fuel to Europe, the company says.
The Dangote Petroleum Refinery aims to raise funds to double its capacity to 1.4 million barrels a day by 2028, which would make it the world’s largest refinery, surpassing Jamnagar in India. Listed on the Nigeria Stock Exchange, the IPO is targeting up to 10 million shareholders across Africa. Describing it as an “historic day”, Dangote said that the IPO was “not simply about listing a company. It is about listing a new possibility for Nigeria, and for Africa.”
Investors can buy as few as 10 shares at 525 naira each, potentially raising 2.15 trillion naira ($1.6 billion) in a move Dangote hopes will give ordinary people a chance for a stake in a long-term asset. He has said the offering, which closes October 13, will be the biggest IPO in African history and has encouraged participation by small investors, including people on lower incomes, such as domestic workers and drivers. “We believe that an asset of this magnitude should not create value for only very few people, it should create value for millions of people,” said Dangote.
Dangote draws parallels with US giants Amazon and Microsoft, whose early shareholders saw the value of their investments grow dramatically. Monday’s opening saw a surge in interest, with several investment platforms such as Bamboo reporting on X that it was experiencing “a much higher than expected traffic trying to get into the Dangote IPO”. Another investment site, Cowrywise, said it was “seeing more traffic than usual” on its app during the first few hours of the offer going live.
In July, the mega-refinery secured $2.5 billion in investment from private investors. Located outside Nigeria’s economic capital Lagos, the refinery has become a major part of Dangote’s business empire, which spans cement and sugar to fertiliser production. Dangote also plans to build a 700,000 barrel-per-day east African oil refinery in Lamu, on the Kenyan coast, as the company is also expanding its footprint in other African countries. Africa currently imports more than 70 percent of its refined fuel, according to an Africa Finance Corporation (AFC) report in April.
© 2024 AFP
