Africa's richest man, Aliko Dangote, launched an initial public offering (IPO) for his $19 billion Nigerian oil refinery, seeking $1.6 billion from retail investors across Africa. The IPO, dubbed "for the people," values the refinery at about $49 billion and offers 4.1 billion shares at ₦525 ($0.40) each, with a minimum investment of 10 shares or ₦5,250 ($4). This move is intended to broaden ownership and allow ordinary citizens to invest in a world-class industrial asset, with some analysts predicting millions of new investors in Nigeria's markets.
The initial demand for the IPO was extraordinarily high, with ₦1.5 trillion in subscriptions within the first six hours, nearly 70% of the total ₦2.15 trillion base offer target. This overwhelming demand caused temporary outages on popular digital investment platforms. The IPO aims to fund a $14.3 billion expansion that would double the refinery's capacity from 700,000 barrels per day to 1.4 million barrels per day. Dangote will retain 87% ownership of the refinery, which is Africa's largest.
While proponents like Mohammed Saidu of TrustBanc see it as a "game-changing IPO" for Nigeria's markets, and analyst Ayodele Oni views it as a "game-changer" for wealth distribution, some critics have raised concerns. Feyi Fawehinmi, a UK-based accountant, argues that investors are being asked to pay significantly more for the refinery's earnings compared to peer refiners. Abdulkabeer Tijani, a Lagos-based researcher, also suggested the share price might already be too expensive, requiring substantial profits and cash flow to justify the $49 billion valuation. Despite these concerns, the IPO is designed to appeal to a broad range of investors, including civil servants, teachers, artisans, and students, by offering a low minimum investment.
