Botswana to Host Southern African Trading Hub for Dangote Refinery IPO

Botswana has been selected to host the Southern African component of the planned initial public offering for Dangote Petroleum Refinery. This move gives Botswana a central role in connecting investors across Southern African markets to the proposed share sale. The refinery's promoters extended the IPO timeline by two weeks, to October 27, to establish structures allowing wider African investor participation. Collen Tapfumaneyi, chairman of the Southern African Development Community (SADC) Committee of Stock Exchanges, confirmed Botswana’s selection.

The decision positions Botswana to host trading in the refinery's shares for Southern African investors, marking a prominent role for its stock market in what is described as Africa’s largest IPO to date. The offering, launched on September 14, involves the sale of 4.1 billion shares. Dangote Refinery seeks to raise $2.1 billion through this offering to fund a significant expansion. This fundraising aims to double its processing capacity by 2030.

The proposed IPO is expected to value the Dangote Petroleum Refinery business at $50 billion. The refinery, which currently processes 700,000 barrels of crude oil daily, plans a $14.3 billion expansion to achieve its target capacity. The company recently reported a net profit of $4.725 billion, reversing a loss from the previous year, with revenue more than doubling to $22.5 billion. Nearly 20% of the shares, representing up to $300.4 million, have been allocated to East African investors.

For Botswana, hosting this component could significantly raise the profile of its domestic stock market and test the ability of African exchanges to coordinate cross-border transactions. The IPO provides Dangote Petroleum Refinery a route to attract capital from African investors and broaden ownership beyond its existing shareholders. This initiative also addresses long-standing challenges in African capital markets regarding connecting investors across national borders due to differing infrastructure and regulations.

Regional engagements for the IPO include Botswana, followed by Ethiopia and Egypt, as the company builds support across the continent. Uganda has already opened its market to the offering after its Capital Markets Authority approved the promotion and distribution of the refinery’s securities to local investors. The success of this large-scale transaction will depend on the final terms of the offering, the arrangements for investors in different markets, and the overall appetite for refinery shares at the proposed valuation.