Talks between the Dangote Group and multiple African bourses were initiated earlier in April to examine mechanisms for extending the $1.6 billion refinery initial public offering to investors outside Nigeria. While the initiative aimed to broaden regional participation, variations in regulatory frameworks across different countries have complicated the execution.
Edoh Kossi Amenounve, Chief Executive Officer of the Abidjan-based Bourse Régionale des Valeurs Mobilières, known as BRVM, revealed these details during an interview with Reuters on the sidelines of the Africa Financial Summit held in Luanda.
What challenges hindered the cross-border listing?
According to Amenounve, discussions focused on how continental stock exchanges could take part in the public offering despite divergent listing rules. Reaching a unified agreement proved difficult due to these regulatory discrepancies.
"It was not easy to have a kind of consensus on how the IPO can be conducted in all these different markets," Amenounve stated during the interview.
What alternative methods were considered for regional participation?
To navigate the regulatory hurdles, stakeholders evaluated the deployment of Global Depositary Receipts. This financial instrument would permit securities mirroring Dangote Refinery shares to trade on other regional bourses, a mechanism previously utilized in markets like Kenya and Botswana.
The public offering concluded on October 28, drawing overwhelming demand of approximately 6.4 trillion naira, equivalent to $4.77 billion, from both retail and institutional domestic buyers. Sources close to the transaction indicated that total subscriptions reached nearly three times the value of the shares initially placed on offer. Official listing of the securities on the Nigerian Exchange is anticipated later in November.
How do regulatory hurdles impact African capital markets?
Amenounve pointed out that corporations pursuing multi-country listings must secure distinct authorizations from financial regulators in every operating territory. He suggested that streamlining this framework requires deliberate regulatory harmonisation and mutual recognition among member states.
He further observed that while the digital and operational infrastructure for cross-border asset trading is already established via the African Exchanges Linkage Project, legal and regulatory barriers continue to hinder seamless execution.
In related developments, the BRVM chief executive announced that the introduction of West Africa's inaugural derivatives exchange has been deferred to 2027 to allow adequate time for completing technological integration and regulatory approvals. The upcoming derivatives portfolio will initially feature forward contracts tied to select equities and market indices as the region continues to prioritize development in sectors such as agriculture, mining, energy, and industrialisation.