Explainer: What Foreigners Need to Buy Dangote IPO

Nigerians living abroad and eligible foreign investors may also participate in the Dangote Petroleum Refinery and Petrochemicals Free Zone Enterprise public offer, but access depends largely on meeting Nigeria’s identification and banking requirements.

Pinnacle Daily reports that the refinery is offering 4.1 billion new shares at an indicative price of ₦525 each, with a minimum subscription of 10 shares.

According to Lanre Buluro, Managing Director, Investment Banking, Chapel Hill Denham, the process is designed to be digital and can be completed within minutes.

What documents are required?

Buluro said an investor needs a Bank Verification Number (BVN), a mobile phone or laptop and a bank account.

“The issue is not about being Nigerian or not. It is about the documents that are required to open a CSCS account,” Anyanwu explained.

Pinnacle Daily reports that the Central Securities Clearing System (CSCS) is the electronic system through which investors’ shares are recorded and held.

For Nigerians living abroad who already have a Nigerian BVN and bank account, subscribing should therefore be relatively straightforward.

What if a Nigerian abroad does not have a BVN?

This is likely to be the biggest hurdle, Anyanwu said. “BVN is a showstopper,” explaining that investors without the required Nigerian identification details may not be able to complete the normal subscription process.

This means Nigerians abroad who do not have a BVN may first need to resolve their banking and identification requirements before participating through the standard route.

Can investors subscribe digitally from abroad?

The offer is designed to be digital. Buluro said investors can use platforms including Moniepoint, MTN MoMo, Airtel, Payaza, Piggyvest, Paga, Bamboo and Chapel Hill Denham’s Invest Naija.

He explained further that investors do not necessarily need an existing CSCS account because it can be created after their BVN and bank account details are verified.

A stockbroker sits behind the digital platforms, and after the transaction and before allotment, the stockbroker will contact the investor with their CSCS and Clearing House Number.

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Anyanwu, however, advised investors to understand how individual investment apps handle public offers and to consider dealing directly with registered stockbrokers where necessary.

What if the investor does not have a Nigerian address?

According to Anyanwu, the absence of a Nigerian residential address does not automatically prevent participation.

“Somebody does not have a Nigerian address per se. That one is no showstopper,” he said.

However, investors still need to satisfy the documentation and verification requirements of the relevant financial institution or stockbroker.

Can foreigners buy the shares?

Foreign nationality alone does not prevent an investor from participating, according to Anyanwu.

“What I can tell you is that if you are not in it, it is not because you are Ghanaian. It is simply because you happen to live outside Nigeria,” he said.

The practical issue is whether the investor can meet the required Nigerian banking and identification conditions.

Anyanwu said foreigners interested in investing should explore the requirements with Nigerian banks or financial institutions that serve customers conducting business with Nigeria.

Can someone else subscribe on behalf of a diaspora investor?

Anyanwu said a person abroad who cannot independently complete the process could consider using a trusted relative in Nigeria, provided the arrangement is properly structured and complies with applicable rules.

He recalled the case of a US-based investor who used four relatives to open accounts.

“There is a young man in the US. He used four of his relations to open accounts, and of course they have an agreement,” he said.

However, investors should not treat informal arrangements as a substitute for proper legal ownership and documentation.

What about nominee accounts?

A nominee arrangement can allow an intermediary to hold shares on behalf of underlying investors, but Anyanwu said such arrangements require regulatory approval and must meet stringent conditions.

Investors should therefore not assume that a nominee structure is automatically available for the Dangote Refinery offer.

Can diaspora investors receive dividends in dollars?

Yes, but Anyanwu said investors who want their dividends paid in dollars would need a domiciliary account, which is a bank account that holds foreign currency.

“For you to receive your dividend in dollars, you will have to open a domiciliary account,” he said.

Do diaspora investors need to subscribe immediately?

No, Anyanwu explained that investors do not need to apply on the opening day. He said, “You must not buy on Monday. You must not even buy next week. You could still buy up to 13th October.”

According to him, applications are collated after the offer closes, before the final allotment is determined.

For Nigerians abroad and foreign investors, therefore, the key issue is not physical distance from Nigeria. It is having the required identification, bank account, and verification details needed to access the Nigerian capital market.