Market Spotlight: Will Dangote’s IPO mark a step change for Africa’s stock markets?

The listing of Nigeria’s Dangote Petroleum Refinery will be the largest ever IPO in Africa, but its legacy could extend well beyond simply making a mark on the record books.

Founded and built by Africa’s richest man, Aliko Dangote, the refinery is the largest single-train oil refinery in the world (a facility with a single integrated distillery that can produce multiple petroleum products, rather than different units for individual products) and is expected to raise US$1.6 billion from its IPO, valuing the company at close to US$50 billion.

Launched in 2013, the refinery cost more than US$20 billion to build and began producing aviation fuel in 2024, with diesel and petrol production coming on-stream subsequently.

The project has been transformational for Nigeria’s energy industry and economy. Even though Nigeria has long been Africa’s biggest oil producer, the country has depended heavily on oil imports for years because of poor domestic refining infrastructure. The Dangote facility has completely changed the game, with sufficient capacity to not only cover all domestic demand, but also export refined product into global markets.

The people’s IPO

The refinery IPO, which will close books in the middle of October, however, is more than just a vindication of commercial success, and could signal the beginning of a step change in the depth of capital markets in Africa.

Aliko Dangote has referred to the listing of the refinery as the “People’s IPO” and has priced shares at around ₦525 ($0.40) – the cost of a bottle of Pepsi – to make buying stock in the IPO as accessible to as many retail investors as possible. He hopes that as many as 10 million individuals will invest in the offering.

Stockbrokers running the IPO (no fewer than 26 firms have been appointed) see this as a watershed moment for the stock market not only in Nigeria, but across the whole of Africa.

Africa’s stock markets have struggled to gain credibility over the years because they have been deemed to be too small and volatile, but if the Dangote IPO can muster retail investors in the numbers hoped, perceptions of the investor base and liquidity in the continent could change.

Fintech companies, like Bamboo, have played a key role in enabling African retail investors to invest, providing digital wealth platforms that open access to stock market investments for individuals. The Nigerian Exchange has also embraced technology to broaden access, and reached thousands of people based in rural areas by allowing them to purchase Dangote Petroleum Refinery shares using point-of-sales terminals.

Dangote will not be the only African IPO this year to benefit from retail investor participation. In July Unitel, Angola’s largest telecoms company, raised US$321 million when it listed in Luanda, bringing in more than 11,000 new investors in one of the country’s biggest ever IPOs.

The next step for African markets

The next step for Africa is to see whether the continent’s financiers can find ways to bring together enthusiastic, but still fragmented, retail investor bases more consistently to build a pan-regional domestic capital base that is operating at scale.

Dangote’s retail ambitions are impressive, but may just be the beginning of much more to come.