Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company (FDC), has urged Nigerians to consider investing in the Dangote Refinery Initial Public Offering (IPO), saying it could provide a more reliable route to earning revenue and dividends than gambling.
Gatekeepers News reports that Rewane spoke on Channels Television on Friday while discussing the planned IPO and its potential impact on Nigeria’s investment culture.
He said the proposed target of attracting 10 million investors could give the Dangote Refinery one of the largest shareholder bases globally.
“If you can get 10 million shareholders to participate in the IPO, the Dangote refinery will have the largest number of shareholders in the world. But that doesn’t mean the value of the investment,” Rewane said.
The economist said the wider participation of Nigerians in the IPO could help encourage an investment culture, particularly among people who spend a significant portion of their income on betting and gambling.
“But it is significant as we are developing and nurturing an investment culture amongst Nigerians who, before now, spent almost 20 to 30 percent of their income at the bottom of the pyramid on gambling and on betting for football,” he said.
Rewane argued that buying shares in the refinery would give investors an identifiable asset and the possibility of earning returns through revenue and dividends.
“It offers a surer bet of getting revenues and dividends than the 0.0001 probability that you will get a football match or a wrestling battle,” he said.
He also compared investing in the refinery with selling Permanent Voter Cards (PVCs) for immediate financial gain, urging Nigerians to favour long-term investment.
“You are better off with your N5,000 share than selling your PVC for N10,000 or N15,000 and consuming it,” Rewane said.
According to the economist, the distinction between gambling and investment lies in the basis on which people commit their money.
“The difference between a gambling act, a lottery act and an investment is that in one case, you are investing based on known parameters; in the other one, you are actually just gambling and taking a chance,” he said.
Rewane said the planned IPO could also democratise participation in Nigeria’s capital market by allowing ordinary citizens to become shareholders in one of the country’s major companies.
“Therefore, you are democratising the market and economic process as distinct from democratizing the electoral process,” he said.
He further described the refinery as a potentially significant investment opportunity, noting that its expansion could create benefits for investors and government through profits, dividends and tax revenue.
“So it is a compelling investment opportunity which puts revenue and profits and dividends into the pockets of consumers and investors, puts a lot of tax revenue in the pockets of the government,” Rewane said.
The Dangote Refinery IPO is expected to give Nigerians an opportunity to acquire shares in the company as part of efforts to broaden ownership and participation in the capital market.
