Dangote Refinery targets $5bn IPO, set to be Africa's largest listing

Dangote Petroleum Refinery and Petrochemicals FZE is preparing to raise about $5 billion through an Initial Public Offering expected to be completed in October. The funds will expand the refinery's processing capacity from 650,000 barrels per day to 1.4 million barrels per day.

According to a Reuters report, the planned share sale is expected to rank as Africa's largest stock market listing if successfully completed. The company has filed an initial application with the Securities and Exchange Commission and is awaiting regulatory clearance.

IPO set for October after SEC approval

Once approval is secured, the refinery is expected to release its prospectus in September, paving the way for the public offering in October. One source said the final amount will depend on the Nigerian regulator.

“The IPO’s target was $5bn, but the final figure will depend on what the Nigerian regulator approves, as the primary listing will be on the Nigerian Stock Exchange,” the source said.

If the IPO raises the targeted amount, it would represent more than four per cent of the Nigerian Exchange's All Share Index, whose market capitalisation stood at approximately $116 billion as of Tuesday.

Expansion plans and continental interest

The refinery intends to channel the proceeds into expanding its Lagos facility as part of a broader strategy to reduce Africa's reliance on imported petroleum products while boosting the continent's capacity to export refined fuels.

The proposed listing comes shortly after the refinery completed a $2.5 billion private placement, selling a six per cent equity stake that valued the business at around $40 billion. Built at an estimated cost of $20 billion, the refinery commenced commercial operations in 2024 and attained full production capacity earlier this year. The Nigerian National Petroleum Company Limited owns slightly more than 7 per cent of the company.

Beyond Nigeria, the refinery is attracting significant interest from investors and stock exchanges across the continent. Sources said exchanges in South Africa, Kenya, Egypt, Ghana and Rwanda have held discussions with the company's advisers regarding the transaction.

In addition to expanding its Lagos operations, the company is reportedly exploring the construction of another refinery on the Kenyan coast in collaboration with governments in East Africa. Earlier this year, President of the Dangote Group, Aliko Dangote, announced plans to increase the refinery's capacity to 1.4 million barrels per day, reinforcing its ambition to become one of the world's largest refining hubs.

Sources also revealed that investors participating in the IPO would have the flexibility to subscribe in either naira or US dollars, with returns payable in the selected currency. This arrangement is expected to appeal to both domestic and international investors as the refinery seeks to broaden its shareholder base while financing its next phase of expansion.

What it means for the naira and investors

The IPO gives Nigerian investors a direct chance to own a piece of the refinery and opens the door for dollar-denominated participation from abroad. A successful listing would deepen the NGX and strengthen confidence in Nigeria's capital markets, while the refinery's expansion plan points to lower fuel imports and reduced pressure on the naira over time.