The Dangote Petroleum Refinery is seeking to raise about N2.15tn from the public through the sale of 4.1 billion shares at N525 each. This Initial Public Offering has opened the door to retail investors on an unusually broad scale, with a minimum subscription of just 10 shares, or N5,250. The offer has generated significant interest, with some digital investment platforms reportedly struggling with the volume of traffic from prospective subscribers.
The interest in the Dangote Refinery IPO has led to debates about whether the shares represent good value, including comparisons with more established stocks with longer histories of paying dividends. There have also been commentaries about Aliko Dangote himself, his record as an industrialist, and the ambition behind the refinery. These conversations have been interesting to watch, leading to a broader question: what makes people willing to hand over their hard-earned money to a business today in the expectation that it will create value for them tomorrow?
The answer to this question is trust. Every time a customer buys, an investor invests, an employee accepts a job, a supplier extends credit, or a partner signs an agreement, somebody is effectively saying: I trust you to keep your promise. Building that trust is difficult, and maintaining it is harder still, especially when things go wrong. This is where the difference between being successful and having staying power begins to matter.
Organisations tend to prepare far better for the future they want than for the one they do not. Think of the management time devoted to budgets, revenue targets, expansion plans, product launches, market-entry strategies, and five-year growth plans. None of this is wrong; it is essential. However, preparing for crisis is not pessimism, nor does it mean expecting disaster around every corner. It is an acknowledgement that building for the future must also include preparing for the disruptions that could threaten it.
When everything is going well, communication is relatively easy. The real test comes when an organisation is under pressure and management itself may not yet have all the facts. It is then that organisations discover that many of the capabilities required in a crisis cannot be created after the crisis has begun. This is also where those who put their money into a business acquire a stake in its future, however small, and with that stake come expectations.
There are some basic questions worth asking before an organisation finds itself in the full glare of public scrutiny. Do we have a tested system in place for responding to a crisis? Do people know what they are expected to do? Can we establish the facts quickly? Can we make decisions and communicate in time? And, perhaps most importantly, will we be believed? The last question cannot be answered on the day something goes wrong. Credibility is built over time.
For boards and executives, therefore, preparedness should be seen as part of stewardship. Leadership is not only about creating value when circumstances are favourable; it is also about protecting the organisation’s capacity to continue creating value when circumstances are not. Every investor weighing the Dangote offer is making a judgement about the future, knowing there are no guarantees. Markets change, strategies succeed and fail, competitors emerge, and unexpected events intervene.
Key points
- The Dangote Refinery IPO has generated significant interest among investors, with a minimum subscription of just 10 shares, or N5,250.
- Trust is a crucial factor in any business transaction, and building it is difficult, while maintaining it is even harder.
- Organisations should prepare for crises by having a tested system in place for responding to them, and by building credibility over time.
