From Capital Markets to Continental Markets: How Home-Grown Finance Can Fuel Intra-African Trade by Nasubila Ng’ambi

From Capital Markets to Continental Markets: How Home-Grown Finance Can Fuel Intra-African Trade by Nasubila Ng’ambi

• Economy
• July 31, 2026

For many years, Africa’s economic transformation has centred on attracting foreign direct investment (FDI), acquiring sovereign debt and receiving developmental aid. However, recently an important question has emerged—how can African capital finance African industrialisation? Founded by Africa’s richest man, Aliko Dangote, the Dangote Group’s Petroleum Refinery is revolutionising what home-grown finance and domestic industrialisation look like. The Refinery is valued at approximately $50 billion and is pursuing a pan-African public offering of up to $5 billion, arguably defining how African capital markets can contribute to the development of continental markets in one of the most crucial industries of all—fuel. This article argues that the proposed Dangote initial public offering (IPO) is a pragmatic stress-test of the African Continental Free Trade Area (AfCFTA) foundational mandate. This article will outline how the proposed IPO interfaces with the AfCFTA Investment Protocol (the Protocol), the gap which needs to be filled and how similar transactions can be supported in the future.

The Mandate: Moving Capital, Building Africa
The AfCFTA was designed to serve as the African Union’s flagship regional economic integration vehicle, providing the trade infrastructure required to strengthen connections between otherwise fragmented African markets.

Article 3(c) of the AfCFTA Agreement states that the AfCFTA will
“Contribute to the movement of capital and natural persons and facilitate
investments building on the initiatives and developments in the State Parties
and RECs”

This objective rests on the foundation of a single market for goods and services, facilitated by the movement of persons as a means of facilitating economic integration. 1 Although over 12,000 Certificates of Origin have been issued and notified to the AfCFTA Secretariat, signalling eligibility for preferential tariffs, implementation remains uneven, with only 25 African countries currently applying preferential tariffs to 90% of goods traded under the AfCFTA. Many countries have yet to fully implement these commitments and realise the Agreement's potential to boost intra-African trade. Against this backdrop, Dangote's proposed pan-African IPO leapfrogs the current pace of trade integration by pursuing large-scale cross-border capital mobilisation. While tariff preferences are still being progressively implemented, the proposed IPO seeks to connect African investors to a continental industrial asset through integrated capital markets. Reports indicate that preliminary discussions have taken place amongst the Nigerian Exchange Group (NGX), the Johannesburg Stock Exchange (JSE), the Nairobi Securities Exchange (NSE), the Bourse Régionale des Valeurs Mobilières (BRVM), and other exchanges, signalling emerging architecture for pan-African capital formation.

Fortunately, the African Exchanges Linkage Project (AELP) provides complementary capital market infrastructure. The Project is an initiative by the African Development Bank and the African Securities Exchanges Association (ASEA) designed to foster cross-border linkages across African capital markets. The participating exchanges rose from 7 to 15 exchanges having received a $600,000 grant for the expansion. Further, the Pan-African Payment and Settlement System (PAPSS) supports instant cross-border transfers in local currencies, enabling end users to realise savings of up to 27%. These financial platforms provide the infrastructure to support a pan-African equity offering.

From Crude to Continental Supply Chains: The Industrialisation Dividend
African countries spend approximately $30 billion per annum on petroleum imports; however, costs have surged with the conflict in the Middle East, highlighting the pressing need for supply chain diversification. The Dangote Refinery is transforming African trade dynamics, having supplied refined petroleum products to Côte Ivoire, Cameroon, Tanzania, Ghana, and Togo totalling 456,000 tonnes. These shipments were sold to international commodity traders on a Free on Board basis, who then coordinated onward delivery. By April 2026, the refinery had shipped a further 17 cargoes to other African countries, assuring West, Central, and East Africa of continued supply.

Recent reports indicate that Dangote is exploring opportunities for a major refinery project in East Africa, while countries such as Angola continue to invest heavily in expanding refining capacity through projects such as the Cabinda Refinery, with Botswana reportedly considering 30% equity participation in the Lobito Refinery. Taken together, these developments suggest that Africa is entering a new phase of industrial ambition—one that seeks to move beyond extraction and towards processing, manufacturing and regional value addition.

The AfCFTA Investment Protocol
The Investment Protocol was adopted by the AU Assembly on 19 February 2023, but has not yet entered into force. Article 23 of the AfCFTA Agreement states that the Investment Protocol, together with the Intellectual Property Rights and Competition Policy Protocols, will enter into force 30 days after the deposit of the 22nd instrument of ratification. The precise number of ratifications received to date is not publicly disclosed. However, the Protocol is designed to consolidate investment governance across the continent by replacing approximately 183 Bilateral Investment Treaties (BITs). 

What the Protocol Got Right
The Protocol is designed to encourage intra-Africa investment flows to promote sustainable development across different states. Therefore, the operationalisation of the Investment Protocol will facilitate capital transfers that comply with national and international law; respect for business ethics, human and labour rights; and respect for the rights of indigenous peoples. Further, the Protocol will support host states’ pursuit of legitimate public policy objectives, including environmental protection and public health. Further, the Investment Protocol presents a radical departure from the highly controversial Fair and Equitable Treatment standard, in pursuit of the more host-state-friendly administrative and judicial treatment. 

The Visible Gap

According to the Investment Protocol, an investment is defined as “An enterprise or company, as defined in this Article, which is established, acquired or expanded in conformity with the laws and regulations of a Host State by an investor which maintains substantial business in the territory of that Host State”. 

Ideally, this definition should protect large-scale cross-border capital flows like the proposed Dangote Refinery IPO; however, it does not, for two key reasons: firstly, the structure of the enterprise and secondly, the nature of the investment proposed by the IPO.

The Dangote Refinery is not classified as an investment in terms of the protocol, because it does not meet the key elements of an investment. Firstly, although the Dangote Refinery is an established enterprise, it was founded by the Dangote Group in Lagos, Nigeria; therefore, it is an indigenous enterprise operating within its home state. Consequently, it is excluded from the definition of an ‘investment’ in terms of the Investment Protocol because there is no host-state/investor relationship to regulate.

Secondly, the proposed IPO is excluded from protection under the Investment Protocol because investors in the IPO will not “maintain substantial business in the territory of that Host State”. The proposed IPO is classified as a portfolio investment which is explicitly excluded from the category of investments covered by the Protocol. Portfolio investments are defined as investments that do not offer the investor the opportunity to exercise management nor influence the management of the enterprise.

Further, the International Monetary Fund’s (IMF’s) Balance of Payments and International Investment Position Manual (BPM6) uses a 10% threshold to distinguish between portfolio and FDI, where shareholding in excess of 10% falls into the direct investment category. 9 Since the proposed Dangote Refinery IPO will only offer 10% of its equity, the offering falls squarely within the portfolio investment category when measured against both the Investment Protocol and the IMF’s BPM6.

Therefore, the proposed Dangote Refinery IPO is not covered by the Investment Protocol, and similar transactions will face the same fate. This demonstrates a lacuna in the Protocol worth considering; the AfCFTA Investment Protocol should treat portfolio investments as an investment category worthy of protection under a harmonised continental framework. At present, the Protocol’s efficacy will be displayed if Dangote chooses to expand its footprint by establishing the proposed East Africa Refinery. However, since the Protocol has not yet entered into force, present and future investments are left without a strong intra-African-focused architecture to govern investment relations between states. Therefore, the pursuit of large-scale projects such as the Dangote Refinery and prospects of regional expansion remain subject to BITs and other international instruments.

Way forward

Article 28 of the AfCFTA Agreement states that the Agreement and its Protocols are subject to review every 5 years to ensure their continued effectiveness, facilitate deeper regional integration, and enable adaptation to changing regional and international circumstances. Therefore, I recommend amending the Investment Protocol to include portfolio investments, thereby protecting capital flows through a harmonised continental framework that supports the objectives of the AfCFTA.

Conclusion
This article has discussed how the Dangote Refinery IPO has the potential to accelerate intra-African trade by strengthening regional supply chains while enabling pan-African capital flows through equity ownership. The article highlighted notable efforts in supply chain diversification ranging from the Dangote Refinery to Lobito in Angola, demonstrating a new era for African industrialisation. The article discussed the benefits offered under the draft AfCFTA Investment Protocol, while highlighting gaps such as the exclusion of portfolio investment, which is the crux of the proposed Dangote Refinery IPO. The article concludes by recommending the inclusion of portfolio investment and emphasising the importance of the AfCFTA Investment Protocol for present and future investments.