Why African savers struggle to buy shares across borders

Africa’s largest refinery listing has exposed a question that touches ordinary savers across the continent: why is it still so hard for an African investor to buy shares in an African company listed somewhere else on the continent?

Dangote, the Nigerian industrial group behind the refinery, held talks with African stock exchanges about widening access to its $1.6 billion initial public offering beyond its home market. The effort, according to the head of West Africa’s regional bourse, ran into a familiar obstacle: regulators in each market still insist on giving their own approval, and their rules do not match.

Edoh Kossi Amenounve, chief executive of the Abidjan-based BRVM, told Reuters the discussions began in April at Dangote’s invitation and centered on how exchanges across Africa could take part in the offering despite differing listing rules. Speaking on the sidelines of the Africa Financial Summit in Luanda, he acknowledged the difficulty. “It was not easy to have a kind of consensus on how the IPO can be conducted in all these different markets,” he said.

For now, the offering has closed, and demand at home was strong. The IPO, which closed on October 28, drew around 6.4 trillion naira ($4.77 billion) in demand from Nigerian retail and institutional investors, roughly three times the amount on offer, people with knowledge of the situation told Reuters. The shares are due to list on the Nigerian Exchange later in November.

But the episode illustrates a wider point about who gets to participate in Africa’s capital markets. Under current arrangements, a company seeking to list across multiple African jurisdictions must obtain separate clearance from the securities regulator of each market. Amenounve urged regulators to move toward mutual recognition of each other’s decisions. “If you want to ease this kind of process, maybe it is time to think about harmonisation and mutual recognition,” he said.

One route considered during the talks was the use of Global Depositary Receipts, instruments representing the shares that could be listed on other African exchanges, in a model similar to what has already been done in Kenya and Botswana. Such an approach could, in principle, give investors outside Nigeria a way into offerings like this one without needing a direct listing in each country.

The technology for cross-border trading, Amenounve said, already exists through the African Exchanges Linkage Project. What remains are the regulatory barriers that keep markets apart.

Meanwhile, the BRVM chief flagged separate developments on his own exchange that bear on what savers in the region can access. The launch of West Africa’s first derivatives market has been pushed back to 2027, citing outstanding regulatory and technology work. Initial products would include forwards on market indexes and selected stocks.

Looking further ahead, he said the exchange expects one or two IPOs in 2027 and described it as “very, very important” to diversify beyond its concentration in banks and telecoms. “The future of the continent is also in mining, agriculture, industrialisation, energy,” he added.

Taken together, the talks and their stumbling blocks point to a structural gap. A listing that drew oversubscribed demand from Nigerian investors could not easily be shared with investors elsewhere on the continent, not for lack of interest or infrastructure, but because approval processes remain fragmented. The conversations that started in April suggest some market operators see that as a problem worth solving. Whether regulators agree, and how quickly, will help determine whether the next large African offering reaches more of the continent’s own citizens, or stays within the borders of a single market. ($1 = 1,341.5600 naira)