Onome Amuge
Aliko Dangote is testing the boundaries of Nigeria’s capital markets with a proposal that blends ambition with a pointed response to currency instability, considered one of the country’s most persistent economic problems. When his $20bn oil refinery lists on the Nigerian Exchange next year, shareholders will buy in naira but be paid dividends in US dollars, a structure that, if approved, would be unprecedented at this scale in Africa’s fourth largest economy.
Speaking in Lagos, Dangote described the plan as a practical solution for domestic investors who have watched the value of their returns erode by years of naira depreciation. “You buy in naira, but you get dividends in dollars,” he said, adding that the framework is being developed with the Nigerian Exchange (NGX) and the Securities and Exchange Commission (SEC). In effect, the proposal offers Nigerian shareholders access to hard-currency income without having to move their capital offshore, a significant proposition in a market starved of foreign exchange.
The refinery and petrochemicals complex, one of the largest industrial projects ever undertaken in Nigeria, is expected to offer 10 per cent of its equity in the initial public offering. Dangote said the domestic market would be prioritised over international secondary listings, underscoring his long-held view that Nigeria’s capital markets should be able to host its biggest corporate champions. “We want the Dangote Refinery to be the golden stock of the exchange,” he said.
Dangote expects about $6.4 billion in annual foreign-currency revenue from petrochemical exports, including polypropylene and fertilisers, providing a natural hedge that would fund dollar payouts without drawing on Nigeria’s already strained foreign-exchange reserves. In theory, that export-driven cash flow distinguishes the refinery from most listed Nigerian companies, which generate revenues almost entirely in naira while servicing obligations that are increasingly dollar-linked.
For market participants, the announcement raises the prospect of a structural shift in how Nigerian equities are valued and marketed. Persistent currency weakness has been one of the biggest deterrents for both local and foreign investors, often overshadowing strong operational performance. A dollar-denominated dividend could help reprice risk, offering a clearer line of sight on returns and potentially lowering the cost of equity capital.
The proposal is not without complications. Regulatory approval will be critical, particularly around how dollar dividends are accounted for and settled within Nigeria’s financial system. The SEC has spent years trying to balance market development with currency management concerns, and a large-scale hard-currency payout mechanism could test that equilibrium.
Some economists also caution that even export-backed dollar payments introduce liquidity and timing risks. Nigeria’s foreign-exchange market remains shallow and sensitive to shocks, from oil price swings to shifts in capital flows. Any disruption to the refinery’s export earnings could complicate dividend planning and expose the company to scrutiny over prioritising shareholder returns in dollars over domestic obligations.
Dangote’s broader vision, however, is unmistakably expansive. The group is projecting revenue of $100 billion by 2030, up from about $18 billion today, with a target market capitalisation exceeding $200 billion. Over the past five years, revenue has risen more than fivefold, while EBITDA has climbed from $1.8 billion to $2.8 billion. The refinery, alongside cement, fertiliser and petrochemicals, sits at the core of that growth strategy, anchoring the group’s transformation from a regional conglomerate into a global industrial player.
