MY DANGOTE REFINERY INVESTMENT THESIS I put this together two weeks ago, but honestly, I don’t know why I’ve been reluctant to share it. My aim has always been to provide clarity, but I’ve realised there are many questions about this offer that I can’t confidently answer, especially in my DMs. Still, I thought it was worth sharing my perspective. …The god called last week to ask why I wasn’t participating in the Dangote Refinery IPO, as he hadn’t seen my name on the list. We spoke for about 36 minutes, discussing when I believe the refinery could create value for shareholders, not just through capital appreciation but also through its long-term earnings potential. As usual, he shared some interesting insights into what could play out after listing and I also shared mine My thesis is simple. I’m not buying Dangote Refinery simply because it is Africa’s largest refinery or because everyone is talking about the IPO. There’s a “national cake” element to this opportunity. I believe the influence of Aliko Dangote and his circle could support market sentiment and share-price performance in the near term, before I walk. In that scenario, short-term price action may matter more to some investors than the underlying earnings power. But that is a different thesis from investing for the long term. At ₦525 per share, Dangote Refinery is valued at approximately ₦63 trillion post-offer. Can the business grow into that valuation? Here’s how I see it. THE CASE TO INVEST 1. Scale and earnings growth The refinery reported about $1.82 billion in profit after tax for H1 2026. Plans to expand capacity from 700,000 to 1.4 million barrels per day could provide another leg of growth, although execution and other associated risks remain. 2. Structural advantage Nigeria has historically relied heavily on imported refined petroleum products. Dangote Refinery is positioned to serve domestic demand and export to other African markets. 3. Long-term cash flow potential If capacity utilisation remains strong, refining margins hold up, and the expansion delivers as planned, earnings and cash flow could grow significantly over the coming years. This is expected around 2029! THE CASE NOT TO INVEST At ₦525, the question is no longer whether Dangote Refinery is an impressive business. It is whether the price offers a sufficient margin of safety. Refining is cyclical. Margins can compress, crude supply can be disrupted, and expansion requires substantial capital. Execution must be exceptional for shareholders to realise the expected returns. Remember, a great business bought at an excessive valuation can still deliver mediocre returns. My conclusion? Don’t invest simply because it is Dangote. Don’t dismiss it simply because the valuation looks enormous. If you’re investing for the long term, focus on the price you pay, sustainable earnings power, and future cash flows. And if your goal is a short term, I believe you know what to do. The name may attract you but the numbers should convince you as a long term investor.