Nigerian industrialist Aliko Dangote on Monday opened his refinery to public ownership, seeking to raise $1.6 billion from retail investors across Africa through what is being described as the continent's largest initial public offering (IPO).
Dangote, Africa's richest man, described the offering as an IPO "for the people," saying he wants everyone to have an opportunity to own a stake in the refinery.
Shares of the sprawling Lagos-based refinery are being offered at 5,250 naira ($4) each, with investors required to purchase at least 10 shares. Dangote will retain an 87% stake in the refinery, the largest in Africa.
The refinery's huge scale and prospects for returns have fueled enthusiasm among retail investors, particularly as global oil prices have risen following the U.S.-Iran war.
"I will be a fool not to partake in it and see how it goes. I am placing a lot of emphasis on his name and on the refinery being the biggest in Africa," Abuja-based operations manager Titi Adetoye told The Associated Press, saying she hopes to purchase as many as 1,000 shares.
Nigerian digital investment platform Bamboo said users were experiencing difficulties accessing its platform because of "higher than expected traffic trying to get into the Dangote IPO."
For decades, Nigeria has depended heavily on foreign refineries to process its crude oil because of poorly maintained state-owned refineries, many of which have operated below capacity or remained idle for years.
The launch of the $19 billion Dangote refinery in 2024 changed that dynamic, turning the energy-rich country of more than 210 million people from an importer of refined petroleum products into an exporter.
"It is going to be a game-changing IPO for Nigeria's markets," said Mohammed Saidu, head of research and investment analysis at Lagos-based TrustBanc. He predicted that the offering could bring millions of new investors into the market.
However, the IPO has also prompted questions over Dangote's decision to retain such a large stake and the refinery's valuation following the offering. At $49 billion, the valuation is more than twice the refinery's construction cost. Officials of the refinery have rejected suggestions that the valuation is inflated.
"It is not something someone can classify as people-driven if you still own 87% of the refinery and there are many ways that narrative breaks down," said Joachim McEbong, a senior West Africa analyst at Control Risks.
Some investors have also expressed reservations about the IPO. Abdulkabeer Tijani, a Lagos-based researcher and regular investor in Nigerian stocks, said the shares might already be overpriced at 525 naira ($0.40) each.
"(The share price) puts a bigger duty on the refinery, which suggests that to justify an even higher valuation from the roughly 47 trillion naira ($49 billion), the refinery needs to generate very substantial profits and cash flow consistently," Tijani said.
The Dangote refinery reached its full production capacity of 650,000 barrels per day earlier this year.
Dangote announced plans last year to raise the refinery's capacity to 1.4 million barrels per day. Company officials say the expansion would make it the world's largest refinery, surpassing India's Jamnagar refinery.
Dangote is also seeking to expand his refining business into East Africa and has proposed constructing a refinery in Kenya by 2030.