…Experts, Emir Sanusi Warn Against Borrowing, Selling Assets to Invest
Some Nigerians seeking to invest in the Dangote Petroleum Refinery and Petrochemicals FZE Initial Public Offering (IPO) have turned to personal savings, loans, and proceeds from the sale of assets to raise funds to buy shares.
CDA News Nigeria reports that findings by Saturday PUNCH revealed strong interest in the shares among prospective retail investors, some of whom said they expected the investment to yield substantial returns in the future. While some respondents said they were dipping into savings or raising funds through other means, others said the prevailing economic hardship had made it difficult for them to participate in the offer.
CDA News Nigeria gathered that the refinery opened its IPO on Monday, September 14, giving Nigerians an opportunity to own equity in the company. The offer comprises 4.1 billion ordinary shares priced at N525 each, with the company targeting about N2.15 trillion to part-fund an expansion that would nearly double the refinery’s capacity to 1.4 million barrels per day. The minimum subscription is 10 shares, costing N5,250.
Dangote Group Chief Executive Officer, Aliko Dangote, said the low entry threshold was deliberately set to allow ordinary workers, including drivers, cooks, and domestic staff, to become shareholders, describing the offer as “the IPO for the people.” The offer is expected to close on October 13.
A staff member of the Federal Ministry of Works, David Adelabu, said he would gladly sell a plot of land in Minna to buy the shares. A trader in Dutse, Jigawa State, Adamu Bala, said he planned to use savings from his business. A civil servant, Fatima Mannir, said women in her group had started raising money through contributions known as adashe. A farmer, Mallam Abdullahi Adamu, said he sold farm produce to raise about N500,000.
However, some Nigerians said economic pressures had put the investment beyond their reach. A civil servant in Kogi State, Saliu Joseph, said he could not afford to participate after paying his children’s school fees. A vulcaniser, Ahmed Alkali, said his income was barely enough to meet his family’s basic needs, asking, “How can I buy shares when I have not eaten?”
Investment experts cautioned Nigerians against taking loans, selling properties, or committing all their savings to the IPO, warning that equity investments carry risks. The Group Managing Director of Lancelot Group, Adebayo Adeleke, urged prospective investors to understand the risks associated with the capital market, noting that equities were unsuitable for people struggling to meet immediate financial needs. “If you cannot part with your money for a minimum of three to five years, the capital market is not the place to invest,” he said.
The Head of Financial Institutions Ratings at Agusto & Co., Ayokunle Olubunmi, also urged Nigerians to avoid committing all their savings to the offer, advising them to invest only a portion of their funds and diversify their portfolios.
The Emir of Kano, Muhammadu Sanusi II, had earlier warned prospective investors against using their children’s school fees or selling their homes to invest in the shares, urging them to invest only money they could afford to set aside for some time, suggesting amounts such as N10,000, N20,000, or N30,000.
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