But the $1.6 billion share sale was not registered as a public offering outside Nigeria, the prospectus showed, leaving investors relying on their own country's regulations or finding workarounds using the few eligible online financial platforms.
The disconnect between Dangote's pan-African ambitions and the patchy take-up outside Nigeria shows how the continent's fragmented capital markets continue to constrain cross-border investment.
The IPO was approved by Nigeria's Securities and Exchange Commission, which has no jurisdiction outside of Nigeria, pointing to the regulatory hurdles to a truly pan-African deal.
Aliko Dangote, Africa's richest man and the majority owner of Dangote Petroleum Refinery and Petrochemicals, told Reuters that dealing with multiple jurisdictions' securities rules was a "teething problem".
The continent has pursued economic integration efforts, including the African Continental Free Trade Area, but lacks a framework for jointly regulating capital-market issuance.
"I'm sure with this, a lot of our own capital markets will also try and change their regulations," Dangote said, to make it easier for cross-border investments in the future. "We want to make sure that the African capital markets collaborate with each other."
BUILDING AFRICAN CAPITAL MARKETS
Referring to a proposed refinery in Lamu, Kenya, Dangote said it should be listed on Nairobi's stock market and be accessible to investors across Africa and that, in turn, will help integrate the continent's capital markets.
"That's what we want to do. We want to deepen them," Dangote told Reuters.
There was strong demand for the shares across the continent, Dangote said, adding Kenya's and Botswana's capital markets alone could have fully subscribed the offering. An issuer gets regular feedback from advisers and brokers as an offering progresses.
Kenya approved a public offering of Global Depositary Receipts linked to the IPO, the market regulator said, with just eight days left in the subscription period.
Dangote has said he is aiming for 10 million shareholders in the refinery, double the retail subscribers attained by Saudi Aramco (2222.SE), opens new tab in its blockbuster listing in 2019.
'EXTREMELY DISAPPOINTED'
Markets outside Nigeria wishing to participate in the IPO, such as the Nairobi Securities Exchange, had to seek regulatory approvals, which took weeks to secure.
That left disappointed investors unable to subscribe and blaming disparate regulations for the missed opportunity.
"People were extremely disappointed," said Kenyan financial researcher Sultan Mwangi, who had set aside $5,000 to invest.
Africa's capital markets remain among the world's most fragmented, with regional integration, like boosting the local saving rate to increase investments, lagging efforts in Latin America and parts of Asia and investors still facing a patchwork of national rules and market infrastructure.
In Rwanda, investors had to register with the market regulator before applying for shares, adding another hurdle.
"Those eligible will be assisted by authorised intermediaries but registered in Nigeria," said Celestin Rwakumbuka, chief executive of the Rwanda Stock Exchange.
The Dangote refinery offering demonstrates Africa's ability to finance industrial development, said Hannah Ryder of consultancy Development Re-imagined, as past large capital market deals focused on banks and telecoms.
However, she said the IPO is "somewhat less ambitious in reality than it started off."
"Most importantly and conceptually for the continent's manufacturing aspirations, it raises large domestic finance for an industrial asset, which is fairly unique for the continent," she said.
The African Development Bank has been pushing a financing model called the New African Financial Architecture for Development, aimed at mobilising large-scale local savings after aid cuts.
With Africa's capital markets still shallow and illiquid, the IPO was expected to demonstrate how regional savings could be channelled into major investment projects.
The AfDB did not respond to a request for comment.
TWO INVESTMENT CHANNELS FOR AFRICA
Only two brokerages, Ecobank and Standard Bank-owned SBG Securities, were listed in the prospectus as channels for African investors.
Ecobank, which operates in 34 African countries, said it was seeing "encouraging interest... from investors across East, West and Central Africa." Standard Bank did not respond to a request for comment.
By contrast, Nigerians can use 53 channels, including banks, brokerages and trading apps, to buy shares. Fintech firms say they can help widen access across borders.
"One of the biggest opportunities fintech creates is the ability to remove geographical barriers to investing," said Richmond Bassey, chief executive of retail-focused fintech platform Bamboo.
Bassey said Bamboo provides eligible Africans, including Nigerians outside the continent, access to the Dangote IPO through a licensed nominee in Nigeria.
Dangote has promoted the sale as a way to spread share ownership among ordinary Africans. Investors can buy as few as 10 shares for 5,250 naira ($3.96).
Lagos entrepreneur Jide Owolabi said he is investing despite what he perceived as steep valuation of nearly $50 billion for the refinery.
"There is enough room for revenue growth as they begin to harness the potential from the petrochemicals and other value-added products, such as plastics and detergents," he said.
Others were sceptical.
"There are other companies that can offer better returns on investment," said Peter Oke, a financial literacy advocate in the southwestern city of Ibadan.
By Duncan Miriri, Reuters
