The 2023 general elections created uncertainty, and a projected economic downturn slowed deals. Even so, 2023 was an eventful year for M&A and private equity in Nigeria.
Legislative, regulatory and economic policies shaped the market. It also saw the closing of significant and landmark transactions across key sectors. They ranged from acquisitions, divestitures and mergers to secondary sales, management buy-outs, joint ventures, share buy-backs and winding-ups.
Nigerian mergers and acquisitions in 2023: what the report covers
As usual, we have curated this report to give you premium insights into the state of the Nigerian M&A and private equity market in 2023. It discusses key macroeconomic indicators and significant regulatory developments. It also lists key market activities and analyses knotty issues of law from the year. Finally, it gives foresight for 2024 by anticipating industry trends before they unfold.
Why deal activity fell in 2023
- According to the DealMakers Africa Q3 2023 report, the value of African M&A deals fell to $7.9 billion between Q1 and Q3 2023. The same period in 2022 recorded $15 billion.
- In Nigeria, 62 local deals closed in Q1 to Q3 2023, against 113 in the same period of 2022.
- Capital importation into Nigeria in Q3 2023 was US$654.65 million, a 43.55% fall from US$1.16 billion in Q3 2022, according to the National Bureau of Statistics.
Several events caused the decline. Investors hesitated while the new Government’s policy direction became clear. The fuel subsidy removal unsettled the economy. The unification of exchange rates then drove an all-time depreciation of the Naira, on top of a forex liquidity crunch that began in 2021.
Key legislative and regulatory developments
- The Business Facilitation Act 2023 amended twenty-one laws affecting corporates to improve the ease of doing business.
- The Finance Act 2023 changed tax obligations on M&A transactions.
- The CBN issued its Corporate Governance Guidelines and Due Diligence Regulations 2023.
- The Corporate Affairs Commission raised issued share capital for companies with foreign participation and required annual returns to avoid striking off.
Outlook for M&A and private equity in 2024
The report also looks ahead to the industries where we expect the most M&A and private equity activity in 2024: FMCG and manufacturing, oil and gas, banking, the digital economy, pensions and healthcare. We also expect the SEC to approve the Nigerian Exchange’s amendment rules on cross-border listing, free float and migration between boards.
As a team, we remain optimistic about the M&A and private equity landscape in Nigeria for 2024. We look forward to advising on the deals that will shape it.
For related reading, see our article on how tax reforms affect M&A transactions in Nigeria and our review of the new minimum capital requirements for banks. To read the full report, use the download button below.
