Di much-anticipated Dangote Petroleum Refinery and Petrochemicals FZE Initial Public Offering, wey value di business between $40B to $50B, go now be cross-border listing for multiple African stock markets dis year. Dis go make am not only di biggest IPO for di continent, but di first one for multiple African exchanges.
Dis na di outcome of meeting wey Nigerian Exchange Group Plc (NGX Group) convene, wey bring together stakeholders inside African Securities Exchanges Association (ASEA). Di meeting include representatives from Johannesburg Stock Exchange (JSE), Ghana Stock Exchange (GSE), Ethiopian Securities Exchange (ESX), Bourse Régionale des Valeurs Mobilières (BRVM), Nairobi Securities Exchange (NSE), Securities and Exchange Commission (SEC) of Nigeria, Vetiva Capital Management, Stanbic IBTC Capital and FirstCap (First Capital).
Alhaji Aliko Dangote, President of Dangote Group, wey dey di meeting too, emphasize di long-term vision wey dey back di refinery listing and im broader significance for African investors. Im tok say: “Our objective is to create sustainable wealth for Africa by ensuring that Africans can invest in and benefit from world-class assets built on the continent. We are building businesses with strong foreign currency-earning capacity and will continue to list these assets, giving investors across Africa the opportunity to participate in their growth.”
Di vision encapsulate wealth creation across di continent using integrated approach of unlocking value from local assets by allowing local participation for di upside. Dis listing across multiple exchanges go deepen integration of African capital markets, while creating wealth for local investors, setting di stage for more such listings.
Momentum don dey build toward such multiple stock market listings over di years. For example, di MTN Group, wey list for Johannesburg Stock Exchange (JSE) with operations for multiple African countries, also get some of im subsidiaries independently listed for di local exchanges where dem dey operate; for Nigeria, Ghana, Uganda and Rwanda. Though some of those listings na to meet regulatory requirements, dem allow locals wey dey use MTN network to also participate for di ownership to benefit from di wealth wey dey created.
Dis also mean say not all di dividends dey repatriated to di group, allowing capital to stay for di respective economies, reducing pressure for di local currency. Di preserved capital dey recycled into economic activities wey dey stimulate GDP growth.
FTSE Russell restore Nigeria to im Frontier Market index. Dis move come nearly three years after di country demote to “Unclassified” and mark major victory for di country economic reforms. Di reclassification follow meaningful improvements for foreign exchange liquidity and capital repatriation, addressing di very concerns wey trigger di original downgrade.
Indeed, di establishment of refineries like Dangote add value to local crude production, reducing dependency on foreign end products wey mostly require foreign currency to purchase, putting pressure for di local currency, risking inflation and high interest rate. Analysts expect dis upgrade to trigger massive passive inflows into banking and large-cap stocks, deepening market liquidity.
While di road to reform don be rocky, dis international stamp of approval restore Nigeria visibility and confirm im standing as vital hub for frontier capital. Di listing of Dangote refinery for di back of dis upgrade, mean say there go be massive participation from international investors, given di renewed appetite for di Nigerian market. But e important say room dey make for local investors to be active participants for di listings. Otherwise, di gains of listing for multiple local exchanges no go dey felt and dat fit erode di gains of integration.
For related development, di Dangote Group don announce say e go need at least $40 billion over di next five years to fund growth drive wey include quadrupling urea fertilizer production and more than doubling di capacity of Dangote Petroleum Refinery for Lagos. Di group dey also plan to replicate im 650,000-barrel-per-day refinery for Tanzania to serve di East Africa region. Dis expansion na part of broader strategic roadmap wey dem brand Vision 2030, wey aim to transform di group into US$100 billion annual revenue enterprise by di end of di decade.
Ghana oil marketing company, ZEN Petroleum Holdings PLC, don commence trading for di Ghana Stock Exchange (GSE:ZEN) after successful IPO wey see 128 million shares offered wey dem oversubscribe by 94%, generating bids of GHS970M with GHS640M raised.
BRVM launch di first listing of bonds from di Fonds Commun de Titrisation de Créances (FCTC), as part of Cote d'Ivoire government “Électricité Pour Tous aka Electricity for All” program (PEPT). Di bonds raise CFA60 billion (about $107 million). Each bond get nominal value of 10,000 CFA francs.
Econet Wireless don consolidate im Zimbabwe towers, renewable energy systems, and strategic real estate into standalone infrastructure platform, Econet InfraCo. Econet InfraCo don officially start trading for di Victoria Falls Stock Exchange (VFEX), marking Zimbabwe largest initial listing at valuation of $1 billion and become di 16th equity for di US dollar-denominated bourse. No new capital dem raise; 25% of InfraCo dem distribute to existing Econet shareholders as dividend in specie. Econet Wireless delist from di Zimbabwe Stock Exchange to seek more accurate US dollar valuations and liquidity for VFEX. Hopefully, Econet Wireless go follow with listings for other markets where e get operations.
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