Professor Emeritus of Petroleum Economics and energy expert, Prof. Wumi Iledare, has identified Nigeria’s government structure as a major risk potential investors should watch ahead of Dangote Refinery’s planned $5 billion Initial Public Offering (IPO) in October 2026.
Iledare, in an exclusive interview with Nigerian Newssphere on Wednesday, said the prospects of investing in the refinery remain strong, but investors would closely assess the sustainability and accessibility of crude oil supplies as well as Nigeria’s broader governance and policy environment.
“What investors are looking at is the prospect. And the prospect is good.
“You cannot find any country in the world that is not sourcing one material for the other for the manufacturing of goods and services that they are producing.
“So, the only thing that the investor may be looking at is sustainability and accessibility to crude supplies.
“And so far so good, not having a higher competitive advantage if the majority of the goods that they are using come from Nigeria, well, that will not in any way, in my opinion, compromise the ability for Dangote Refinery to source out the goods if they have the ability to pay for it.”
However, Iledare warned that Nigeria’s government structure could be a source of concern for investors assessing the refinery’s IPO.
“The only thing that would be a little bit worrisome for investors is the government structure of Nigeria.
“Like if they pay for subsidy banks or subsidy non-banks or subsidy grants, those are the only thing investors should be looking at when it comes to buying IPOs,” he said.
He, however, noted that Dangote Refinery’s operation within a free trade zone could help mitigate some of the risks associated with Nigeria’s governance structure.
“But the potential for Dangote’s structure is not only gains on crude supplies from Nigeria.
“Luckily, Dangote is one firms operating in free trade zone.”
The refinery recently shifted its IPO timeline from September to October after securing a $1 billion underwriting commitment.
Nigerian Newssphere reports that Dangote Refinery, Africa’s largest single-train refinery, has become a major player in Nigeria’s downstream petroleum sector, supplying refined petroleum products to the domestic market and export destinations.
The planned IPO is expected to offer investors an opportunity to acquire equity in the refinery while helping the company raise substantial capital for its operations and expansion.
