The Nigerian public has been invited to become owners of the Dangote Refinery. What an extraordinary achievement for Nigerian capitalism! (That was actually a joke)
After billions of dollars in public funds, state concessions, Nigerian oil and the labour of thousands of workers built one of the world’s largest refineries, Nigerians are now being offered the opportunity to purchase a fraction of its shares and this is being celebrated as economic empowerment!
The public offer amounts to just 3.3% of the refinery, while Dangote retains about 84% and with it the power to decide how the refinery operates and how the money it raises is used and you do not own what you do not control!
The refinery cost below $20 billion to construct, although the real figures are guarded secrets. The Nigerian workers built and operate the refinery. NNPC committed over $1 billion towards an intended 20% stake, although its eventual holding fell to 7.2%. Nigerian banks and Afreximbank provided financing, while the Lekki Free Zone offers tax and customs advantages.
However, before ordinary Nigerians could buy shares, the refinery had already raised $2.5 billion from private investors who paid approximately $0.35 per share. The minimum investment was $350,000, effectively restricting participation to wealthy individuals and large financial institutions. These investors were required to hold their shares for a year, hardly a serious obstacle for those capable of leaving millions of dollars untouched.
The public is now being offered shares at ₦525 each, approximately $0.40. Someone who invested $1 million in the private placement would therefore hold shares notionally worth about $1.14 million at the public offer price, a potential gain of $143,000. If fully subscribed, the public offer also brings approximately ₦2.15 trillion into the refinery to finance further expansion, and demand for these shares could support the higher valuation of investments already made by private investors.
The refinery plans to double its capacity to approximately 1.4 million barrels per day, but the profits expected from this expansion are far from guaranteed. The war involving Iran, which led to the closure of the Strait of Hormuz, has disrupted international petroleum markets and created fuel shortages from which Dangote has benefited. In the first half of 2026, the refinery recorded $1.82 billion in after-tax profit, partly on the strength of European demand for its fuel.
Yet the refinery continues to face unreliable domestic crude supplies. Doubling production will require considerably more oil, some of which may have to be imported at internationally determined prices. And if disrupted refineries elsewhere resume normal production, the exceptional refining margins Dangote currently enjoys could decline. The expansion is therefore being financed on expectations of future profits that depend on an unstable international market. If they are disappointed, the refinery may continue producing fuel while the value of its shares falls.
Suppose a worker buys ten shares at ₦525 each, investing ₦5,250 in the refinery. How much can that investment actually earn? A shareholder can receive dividends, which are payments from profits declared by the company. Suppose the refinery pays ₦50 per share over a year, someone holding ten shares receives ₦500, less than half a litre of petrol at the ₦1,215 per litre Dangote charged marketers when it resumed naira sales in July this year. Someone who invests ₦10,500 receives ₦1,000. If no dividend is declared, neither receives any dividend income.
The other possibility is selling shares at a higher price. If the price rises from ₦525 to ₦700, the ten shares bought for ₦5,250 become worth ₦7,000, giving a potential profit of ₦1,750 before costs. If the price falls to ₦400, the investment is worth only ₦4,000.
Compare these amounts with the returns available to those who own billions of shares. Dangote is expected to retain approximately 104 billion shares. At the same hypothetical ₦50 dividend, his holding would receive about ₦5.2 trillion. A ₦100 increase in the share price would add approximately ₦10.4 trillion to the market value of his shares, compared with just ₦1,000 for the worker holding ten.
The difference is not that the billionaire receives a higher dividend per share but that he already owns vastly more shares. The stock market distributes financial returns according to the amount of capital invested, not according to people’s needs!
But Dangote’s gains are not limited to dividends. The IPO values the refinery at approximately $47 billion to $49 billion, more than twice its construction cost. Investors are paying partly for profits they expect the refinery to generate in the future. Marx described this as a form of fictitious capital: the refinery and its products are real, but its shares are financial claims on future earnings that have not yet been and may not be realised! This matters because Dangote does not have to sell his shares to benefit from a higher valuation. If investors expect greater profits and the share price rises, the market value of his enormous holding rises with it. He will also use those shares as security for further borrowing, allowing him to finance new investments without selling his stake in the refinery.
The millions of smaller investments therefore serve a much larger process. They provide the refinery with money to expand, while a successful public offer can support a higher valuation for the shares already held by Dangote and the earlier investors. If the expansion succeeds, the resulting increase in profits and share value will largely benefit those with the biggest holdings, the capitalists and the ruling class. The ordinary Nigerian hoping for a few hundred naira in dividends is helping finance an enterprise whose largest financial rewards remain concentrated among the wealthy!
But these profits do not emerge from nowhere. The refinery must purchase crude oil, process it and sell the resulting petroleum products. How much it earns depends partly on the difference between what it spends on crude oil and refining, and what it receives from selling petrol, diesel and other products. And because fuel is essential to nearly every sector of the Nigerian economy, the prices that generate profits for the refinery also affect the cost of transport, food and production for millions of Nigerians.
This raises a more important question: if Nigeria now has one of the world’s largest refineries, why is petrol still so expensive?
Since Abacha junta days, Nigeria exported crude oil and imported much of the petrol consumed domestically. The Dangote Refinery has increased Nigeria’s capacity to refine its own crude oil, but this has not freed Nigerians from international oil prices. Why? Because NNPC sells Nigerian crude to Dangote at prices linked to the international market, even when payment is made in naira. Dangote then sells the refined petrol at prices influenced by those same international markets. This means that a rise in global oil prices, or a fall in the value of the naira, can make petrol more expensive for Nigerians even though the oil comes from their own country and is refined on their own soil! The refinery says it needs 13 to 15 cargoes of crude a month, while NNPC supplied about seven in May, and it imports the rest at international prices. In July, Dangote began quoting petrol sold to Nigerian marketers in dollars, explaining that it was purchasing much of its crude in dollars while selling refined products in naira.
At the refinery’s July price of $0.779 per litre, petrol would cost approximately ₦1,090 at an exchange rate of ₦1,400 to the dollar. If the naira depreciated to ₦1,600, the same dollar price would translate into approximately ₦1,246 per litre, before transport and distribution costs. The refinery resumed naira-denominated petrol sales later in July, but this did not remove the influence of international crude prices and exchange rates on its costs and selling prices.
Therein lies the answer to the question! Greater production can reduce dependence on imported refined fuel, save transport costs and improve domestic supply. But Dangote is a private capitalist enterprise operating for profit. It will sell its products at prices that protect its margins and maximise returns, subject to market conditions and competition. If exporting petrol earns more than selling it cheaply to Nigerians, there is a commercial incentive to export. If international prices rise, there is no obligation to sell domestically at a price ordinary Nigerians can afford. More refining capacity may therefore mean more profits without any corresponding reduction in the cost of living.
Petroleum moves goods throughout Nigeria, so higher fuel prices increase transport costs, which then affect food prices, manufacturing expenses and the general cost of living, and workers whose wages remain unchanged experience a decline in purchasing power. Meanwhile, the international shortages that raise the refinery’s export earnings do nothing to raise the living standards of Nigerian workers.
As the refinery expands, it may acquire greater influence over domestic petroleum supply, and with it greater bargaining power in its dealings with marketers, suppliers and the state. Decisions about crude allocations, tax concessions, infrastructure and fuel distribution become increasingly important to a business upon which other sectors of the economy depend. Dangote competes with European refiners, but he does so as a capitalist seeking markets and profits, and his competition with foreign capital neither abolishes the wage relationship nor makes fuel more affordable for Nigerian workers.
The Nigerian middle class (petty bourgeois) who buys shares hoping to earn some additional income will discover the hard way that this is a mere illusion. Our quarrel is with a system in which wealth is produced collectively but expropriated by few capitalists, while millions struggle to afford basic necessities.
This nationalisation of the Dangote Refinery and the downstream petroleum industry, with compensation for large shareholders determined on the basis of provable need, while protecting the savings of small investors, remains the only way forward! The objective is to bring petroleum production and distribution under public ownership so that decisions can be organised around the needs of the population rather than for profits. However, transferring ownership to the present Nigerian state or the NNPC bureaucracy would not end this capitalist exploitation. The Nigerian neo-colonial capitalist State that currently exists cannot carry out such nationalisation today, because it has degenerated beyond any capacity to be progressive.
Genuine nationalisation therefore requires a revolutionary transformation of Nigeria’s political and economic structure, replacing capitalist rule with a workers’ government. The major industries, banks and commanding heights of the economy must be brought into public ownership under democratic workers’ control, with production planned to meet the needs of transport, agriculture, industry and households. Only then can the country’s resources be organised to improve the living conditions of its people! But this requires an independent revolutionary workers’ party capable of organising the working class to take political power, not another government administering capitalism.
African industrialisation is necessary. The private enrichment of an African billionaire is not African emancipation!