Online Reporter
Aliko Dangote has long been Africa’s richest man. He’s now poised to make a $23 billion leap up the list of the world’s wealthiest as he opens an initial public offering — the continent’s biggest yet — for his refinery.
The 69-year-old tycoon’s net worth is projected to reach as much as $58,2 billion with the IPO of Dangote Petroleum Refinery and Petrochemicals Fze, according to Bloomberg calculations. That would catapult him past US hedge fund tycoon Ken Griffin and technology billionaire Eric Schmidt.
Dangote is expected to raise about $1,6 billion from the IPO opening September 14 that will value the business at almost $50 billion. It’s part of plans for an Africa-wide empire that will double the capacity of his Nigerian refinery to create one of the world’s biggest and build a processing plant in Kenya to extend his reach from the Atlantic to the Indian Ocean.
The offering demonstrates that African entrepreneurs — backed primarily by local capital — can build and run world-scale operations, and could catalyse a new wave of investment and development on the continent. Dangote’s plant reached full capacity this year, just as the war in Iran kicked off, shielding Nigeria from the supply issues other countries faced. It also made Africa’s most populous nation a net refined-fuel exporter for the first time.
“We, as Nigerians and Africans, must be bold and lead the change to develop our economies,” Dangote said at an IPO signing ceremony in Lagos, Nigeria’s commercial capital. “Only then will the others take us very seriously, only then we’ll be in a position to negotiate and walk away with terms we deserve, not those terms that are given to us.”
Dangote has a net worth of $35,3 billion, according to the Bloomberg Billionaires Index. The refinery’s IPO may lift his personal wealth by as much as $22,9 billion.
The tycoon has billed the sale as “an IPO for the people,” designed to appeal to retail and institutional investors with its minimum subscription of 10 shares, shariah-compliant status and strategy that may pay dollar dividends.
It will close Oct. 13 and a listing is due soon thereafter.
A transaction of this scale is a strong vote of confidence in Nigeria and the continent as investment destinations, said Chidi Iwuchukwu, the executive director of FirstRand’s RMB Nigeria.
“Large flagship listings deepen liquidity, broaden the investor base, and demonstrate that African capital markets can support world-class businesses at scale,” he said. “Perhaps most importantly, they create a blueprint for other leading African companies to access the public markets, raise growth capital, and accelerate their ambitions.”
For Dangote Group, the IPO is the fruition of its boldest bet yet.
It represents more than a decade’s work and an investment of about $19 billion to build the world’s biggest single-train refinery, which currently has capacity of 700 000 barrels daily and which he wants to double as part of a further $14.3 billion of investments.
Even before construction started just outside Lagos, the firm had to stabilise swampland about half the size of Manhattan. It also built roads, developed a port and constructed quays to bring in equipment, including more than 300 cranes and every single nut and bolt.
The refinery is key to the strategy to boost revenue fivefold to $100 billion by the end of the decade, said Fatima Dangote, one of the billionaire’s daughters and the group’s executive director for oil and gas.
Its cement business — the behemoth’s long-standing cash cow — and fertilizer operations will also drive growth, she said.
The group has three listed businesses — Dangote Sugar Refinery Plc, Dangote Cement Plc, and food-seasoning company NASCON Allied Industries Plc — and a majority stake in Dangote Peugeot Automobile Nigeria, among other interests across shipping, power and real estate.
Its expansion comes amid a generational shift, with the tycoon elevating the roles of Fatima – who is the youngest — and her two sisters.
Mariya Dangote, the eldest, heads the food businesses’ operations and leads commercial strategy at the cement unit while Halima Dangote is group executive director of the family office.
Hailing from a wealthy family, Dangote started his own business trading cotton, cashew nuts, cocoa and sesame seeds in the 1970s with a loan from his uncle.
He formed the company that became Dangote Group in 1981, diversifying his operations over time to include sugar and flour mills and cement plants, and has long faced criticism about his companies that dominate their markets.
Dangote followed a “simple formula” to displace his competitors and grew his businesses by building local processing capacity for refined products that are too costly to import, said Chibuike Uche, the chair for the governance of finance and integrity in Africa at Leiden University in the Netherlands.
Dangote’s trajectory resembles that of Indian tycoons such as airports and electricity billionaire Gautam Adani and petrochemicals and telecommunications mogul Mukesh Ambani, as well as Mexico’s Carlos Slim, whose fortune comes from connectivity services and construction.
The Nigerian businessman in 2024 said he plans to emulate Ambani — whose Jamnagar refinery is the world’s largest refiner complex — by investing profits from his facility into another sector.
The quartet became wealthy by making huge bets in markets where infrastructure was scarce; the resulting scale inevitably raises questions about where entrepreneurial success ends and market dominance starts.
“I’ve never been one to say there’s a monopoly,” Uche said. “For economic advancement, one can never put the cart before the horse: the industry has to emerge first, then monopoly rules will grow from that.”
Others are taking notice.
Abu Dhabi National Oil Co. is in talks with Dangote to invest in the business as it looks to secure customers for its crude and expand fuel trading, according to people with knowledge of the situation.
The billionaire’s plans to replicate its Lagos refinery model in Kenya’s Lamu would extend his first-mover advantage to East Africa, a region that relies heavily on imported fuel.
Groundbreaking for the proposed 700,000-barrel-a-day refinery is expected this month, though the project may face environmental challenges because the area is known for its marine life, mangroves and coral reefs.
Greenpeace Africa has called for authorities to halt approvals for the $16 billion project pending the completion of an independent environmental and social impact assessment and public consultation.
While Dangote has offered East African governments a 30% equity stake in the refinery, regional backing isn’t unanimous.
Kenya is championing the project, with Rwanda and Ethiopia showing interest while Uganda weighs it against its own plan for a smaller refinery and an investment in a competing oil hub off Tanzania’s coast.
The plan is being positioned as equally important to help the region become self-sufficient as it is to the group’s cross-border growth ambitions.
“Our vision 2030 and mantra at the Dangote Group is accelerating Africa’s industrialization,” the billionaire said. “As we continue to invest in Nigeria as the powerhouse in Africa, we must also preach and take this gospel to other parts of the continent.” – Bloomberg
