- Nigerian Exchange Group CEO Temi Popoola says Dangote Refinery’s proposed $1.6 billion IPO could increase Nigeria’s active investor base by three to five times.
- The exchange plans to strengthen cross-border trading links with African markets as the offer creates opportunities to attract retail investors and deepen capital market integration.
The Nigerian Exchange Group (NGX Group) expects the planned $1.6 billion initial public offering (IPO) of Dangote Petroleum Refinery to significantly expand Nigeria’s active investor base and strengthen connections between African capital markets.
NGX Group Chief Executive Officer Temi Popoola told Reuters at the Financial Times Africa Summit in London on Thursday, October 22, that the offer could increase the number of active investors in Nigeria by three to five times. Billionaire industrialist Aliko Dangote launched the offering earlier this month, with the subscription period scheduled to run until the end of October.
IPO Targets Broader Retail Investor Participation
Popoola said approximately 12 million Nigerians, representing about 5% of the population, participate in capital markets, but only hundreds of thousands actively trade.
The exchange expects the refinery offering to attract more retail investors through accessible subscription channels, including WhatsApp, point-of-sale terminals and basic mobile phones.
“What we expect this offer to do is, make that three to five times the number of active investors that we have in the country,” Popoola said, without providing a specific target.
The offering could also test demand among investors outside Nigeria and strengthen the country’s position as a source of capital for businesses across Africa.
NGX Strengthens Cross-Border Market Links
NGX Group is working to deepen market connections with exchanges in Egypt, Kenya, Botswana and Ethiopia through depositary receipt arrangements, some of which remain subject to approval.
Popoola said these mechanisms could make it easier for investors to access securities across national markets and help companies attract capital from a broader investor base.
“Africa is being connected not just by rhetoric, but (by) real solutions on the ground,” he said.
The exchange also wants to build on existing cross-border listings. Seplat, Airtel Africa and Guaranty Trust Holding Company already maintain secondary listings in London, while Dangote Cement plans to pursue one as soon as November.
Popoola said companies and exchanges could benefit from arrangements that allow shares to move between markets.
“Those shares are fungible. Capital is able to flow quite freely, if we can emulate that across many other markets, it’s in the interest of our customers,” he said.
Private Capital Challenges New Listings
Despite the potential boost from Dangote Refinery’s IPO, Popoola said private capital continues to make public listings more difficult to attract because large companies can raise funds through alternative channels.
NGX Group expects fewer than 10 Nigerian companies to list over the next year, highlighting the challenge of expanding the market’s pipeline of publicly traded businesses.
The exchange hopes the refinery offering will demonstrate the potential of large-scale public investment to attract new participants and improve access to capital for companies.
Debt Market Gains Could Support Equity Investment
Popoola also welcomed JPMorgan’s decision to include Nigeria’s domestic sovereign bonds in its new frontier-market local-currency index. He said renewed interest from debt investors could help restore confidence and encourage participation in the equity market.
“That’s exactly what we are seeing now, so this is a very good precursor,” he said.
The Dangote Refinery IPO therefore represents an opportunity for NGX Group to expand retail participation while advancing its wider effort to connect African markets. Its longer-term impact will depend on investor uptake, the development of cross-border trading arrangements and the exchange’s ability to attract more companies to public markets.