The Nigerian business environment in 2024 presented a mix of challenges and opportunities. Businesses and individuals grappled with rising costs, foreign exchange scarcity, and inflation-driven value erosion.
The regulatory landscape also experienced rapid changes, further complicating the operating environment. Despite these hurdles, the Nigerian economy demonstrated resilience, marked by significant business deals and a positive outlook for growth amidst global economic turbulence.
Nigeria’s Mergers and Acquisitions in 2024
In the first quarter of 2024 alone, Nigeria recorded mergers and acquisitions (M&A) worth an impressive $2.6 billion, according to DealMakers Africa’s Q1 2024 report.
This placed Nigeria as the leading African country in M&A value outside of South Africa. Out of the 102 M&A deals across Africa during the quarter, Nigeria accounted for 20, solidifying its status as a regional economic powerhouse.
The highlight of these deals was Shell’s $2.4 billion sale of its onshore assets in Nigeria, which stood out as the largest M&A deal on the continent during this period.
Regional Comparisons
• West Africa: The region led in M&A value, with $2.623 billion from 34 deals. Beyond Nigeria, Cote d’Ivoire recorded three deals worth $3.52 million, while Senegal had four deals valued at $19 million.
• Southern Africa (excluding South Africa): This region reported 15 deals worth $179.05 million. Notable among these was Zambia’s $145 million acquisition of a 34.64% stake in Copperbelt Energy Corporation.
• North Africa: Egypt led the region with 16 deals valued at $31.9 million, while Morocco recorded five deals worth $132.9 million. The total M&A value for the region was $165.4 million.
• East Africa: There were 28 deals worth approximately $44 million.
• Private Equity in Africa: The continent saw 62 private equity deals totaling $303.3 million in Q1. Nigeria accounted for 10 of these deals, valued at about $40.25 million.
Key Nigerian M&A Deals in 2024
1. Shell’s $2.4 Billion Asset Sale
Shell announced the sale of its onshore assets to a consortium named Renaissance. The deal involved an initial payment of $1.3 billion, with an additional $1.1 billion linked to receivables and cash balances.
2. Access Bank’s Regional Expansion
In January, Access Bank acquired a 69.67% majority stake in Uganda’s Finance Trust Bank. In March, Access Bank Plc announced its acquisition of KCB Group, although the deal’s value remains undisclosed. The bank also secured a $75 million loan from the Japan International Cooperation Agency (JICA) to fund climate change projects in Nigeria.
3. Significant Private Equity and Venture Capital Investments
Cleva, a fintech platform, raised $1.5 million in pre-seed funding in January. Zanza Finance secured $2.3 million from venture capitalists in the same month. In March, a consortium of venture capitalists invested $100 million in Moove’s Series B funding round.
4. Noteworthy Corporate Transactions
Universal Music Group acquired a majority stake in Mavins Global for an undisclosed amount. Carbon acquired Vella Finance in February. Oak and Saffron announced the acquisition of a 60% stake in Presco Plc, with the deal’s value undisclosed.
5. Solar and Renewable Energy Investments
Chapel Hill Denham facilitated $7.4 million in funding for d.light’s off-grid solar program in February. All On invested $3 million in Nigerian solar company Arnergy, also in February.
6. Agriculture and Trade Finance
Sahel Capital provided a $1.5 million trade finance loan to Acier Nigeria Limited, an agro-allied company, in February.
7. Syndicated Loans and Financial Support
In March, Africa Finance Corporation secured a $1.16 billion syndicated loan from a group of investors, including Société Générale and Bank Muscat.
Impact of These Deals on Nigeria’s Economy
The influx of foreign investments and the successful execution of high-value mergers and acquisitions in 2024 highlight Nigeria’s potential as a lucrative investment destination, despite its challenges. These deals have far-reaching implications for the economy:
1. Boosting Investor Confidence
High-profile transactions like Shell’s $2.4 billion asset sale signal that global investors still see opportunities in Nigeria. These deals help reassure other potential investors about the viability of the Nigerian market, even amidst macroeconomic instability.
2. Job Creation and Skill Development
Many of these transactions, particularly in sectors like energy, finance, and technology, have the potential to create new jobs and enhance the skills of the Nigerian workforce. For instance, Access Bank’s acquisitions could lead to an expansion of operations, requiring new hires and upskilling existing employees.
3. Fostering Innovation and Technology Growth
Investments in startups like Cleva and Zanza Finance, as well as funding rounds for companies like Moove, demonstrate the growing role of technology in Nigeria’s economic landscape. These deals are not just about capital; they are about building infrastructure and systems that enable sustainable innovation.
4. Strengthening Key Sectors
Sectors like renewable energy, agriculture, and financial services are poised to benefit significantly. Investments in solar programs (e.g., Arnergy and d.light) and agro-allied companies (e.g., Acier Nigeria Limited) signal a shift toward sustainability and self-reliance in key areas.
5. Regional and Global Integration
With companies like Universal Music Group acquiring Nigerian assets and Access Bank expanding into Uganda, Nigeria is cementing its position as a regional hub for commerce and a key player in the global business environment.
Key Takeaways
• Nigeria showcased resilience by attracting major investments despite economic challenges like inflation and regulatory uncertainties.
• Significant foreign investments, such as Shell’s $2.4 billion asset sale, reaffirmed the country’s appeal as a lucrative destination for global investors.
• The economy benefited from deals across diverse sectors, including energy, finance, technology, agriculture, and renewable energy.
• Nigeria established itself as a regional leader in mergers and acquisitions, surpassing other African regions in deal value.
• Investments in renewable energy projects, like those involving Arnergy and d.light, highlighted the country’s growing focus on sustainability.
• Cross-border expansions, such as Access Bank’s acquisitions and Universal Music Group’s stake in Mavins Global, reflected Nigeria’s increasing integration into the global business landscape.
