Economy
Nigeria to Make $3.98b from Business Deals in 2018—Report
By Dipo Olowookere
A new report released by Baker McKenzie, a multinational law firm, has predicted an increase in global deal activity next year.
The report, titled Global Transactions Forecast, which is in its third edition, attributed this rise to the easing of key economic and political risks as well as the emergence of positive macroeconomic deal drivers.
It specifically noted that deal making in Nigeria looks set to increase in 2018 and 2019 after a period of policy uncertainty which saw M&A transactions decrease.
Conditions in South Africa are also predicted to improve, but this will depend on political and economic conditions in the country in the next two years, the report added.
According to Baker McKenzie, globally, 2017 has been a period of apprehension for dealmakers and while economic growth has certainly slowed, the cliff-edge some were predicting has failed to materialise.
Following on the momentum created in the second half of 2017, The Global Transactions Forecast, developed in association with Oxford Economics, predicts a cyclical peak in 2018 for several macroeconomic and financial deal drivers, with 2018 marking the high point of the deal cycle for the world’s largest transaction centres.
Head of Africa at Baker McKenzie in Johannesburg, Mr Wildu du Plessis, noted that in Nigeria, policy and economic uncertainties had contributed to stalled dealmaking in the country. Uncertainties included a lack of access to foreign exchange, blockages to the government budget process, and low oil production that had constrained GDP growth.
“As these conditions ease in the final months of 2017 and into 2018, a rebound in M&A to around US$4 billion in both 2018 and 2019 is forecasted,” Mr du Plessis was quoted as saying in the statement made available to Business Post by Baker McKenzie on Tuesday.
In Nigeria, M&A transactions were valued at $1.2 billion in 2016, this is predicted to drop to $716.4 million in 2017.
In 2018, this is predicted to rise to $3.98 billion and to $3.94 billion in 2019.
There were 28 M&A transactions in 2016 and 28 are predicted again in 2017, 35 deals are expected in 2018, rising to 40 in 2019.
In South Africa, the forecast is similar. Growing political risk and a sluggish economy contributed to a halving in total M&A in 2017 versus 2016.
However, the forecast predicts that economy should improve in 2018 thanks to the impact of monetary policy easing and stronger commodity prices. But at around $9 billion in 2019, the forecast for the peak in M&A activity in this region will be less than a third of the level seen in 2015.
Mr Du Plessis noted, however, “For South Africa, there is no guarantee that the predicted upswing will come to pass. There is just too much political uncertainty. If the ANC National Conference in December does not deliver the solution that markets are hoping for, then deal flow and IPO activity will be affected and depressed. If on the other hand there is some hope of a change to the political situation, things may well indeed change for the better.”
Morne van der Merwe, Managing Partner of Baker McKenzie in Johannesburg said, “Current conditions in South Africa have slowed M&A growth in that international investors are reluctant to invest in South Africa due to the political and economic uncertainty. This uncertainty has caused a reduction in Foreign Direct Investment, which, in turn, hindered deal-making. Due to the downgrades and potential for further downgrades, the cost of raising capital for acquisitions has also become more expensive.”
In South Africa, M&A transactions were valued at $10.7 billion in 2016, this is predicted to drop to $4.5 billion in 2017.
In 2018, this is predicted to rise to $8.5 billion and to $9.2 billion in 2019.
In terms of deal volume, there were 115 M&A transactions in South Africa in 2016, this is predicted to rise to 172 transactions in 2017, 273 deals are expected in 2018, rising again to 295 in 2019.
Globally, “After a few soft patches in 2017 we have a more optimistic outlook for the global economy and dealmaking in 2018, as long as the brakes are not put any further on global free trade. We see an uplift in both M&A and IPO activity as dealmakers and investors gain greater confidence in the business prospects of acquisition targets and newly-listed businesses,” added Paul Rawlinson, Baker McKenzie’s global chair. “However, it’s not a done deal, with the threat of a Hard Brexit and a NAFTA collapse both still very real. Business will need to continue to make the case for liberal trade and investment frameworks.”
By Adedapo Adesanya
The woes of the Nigerian Naira in the Nigerian Autonomous Foreign Exchange Market (NAFEX) further continued on Tuesday, February 24.
During the session, the domestic currency weakened against the United States Dollar by N6.13 or 0.45 per cent to N1,355.37/$1 from the N1,349.24/$1 it was traded in the previous trading day.
The local currency also moved southwards on Tuesday in the same market window against the Pound Sterling after it lost N6.39 to trade at N1,828.26/£1 versus Monday’s closing price of N1,821.87/£1, and against the Euro, it depreciated by N4.94 to close at N1,596.36/€1, in contrast to the preceding session’s N1,591.42/€1.
Similarly, the Naira crashed against the US Dollar at the GTBank FX counter yesterday by N4 to settle at N1,361/$1 versus the N1,357/$1 it was exchanged a day earlier, and at the parallel market, it remained unchanged at N1,365/$1.
The fall of the Naira coincided with the Central Bank of Nigeria (CBN) buying US Dollars from the market to slow down the rapid rise of the nation’s legal tender. Latest information showed that last week, the apex bank bought about $189.80 million to reduce excess Dollar supply and control how fast the Naira was gaining value.
The rationale was to keep foreign investors from pulling their money out of Nigeria’s fixed-income market. If they sell their investments, it could increase demand for US Dollars and lead to more Dollar outflow from the economy.
Meanwhile, Mr Yemi Cardoso, the Governor of the CBN, said Nigeria’s gross external reserves have risen to $50.45 billion – the highest level in 13 years, while speaking after the 304th meeting of the monetary policy committee (MPC) of the CBN held on February 23 and 24.
The committee also reduced interest rates by 50 basis points to 26.50 per cent from 27 per cent after inflation eased in January 2026.
As for the cryptocurrency market, losses on concerns by embattled software businesses that artificial intelligence (AI) tools will destroy their business models continued and overturned some rallies on Tuesday.
Binance Coin (BNB) lost 2.1 per cent to sell for $585.41, Cardano (ADA) dropped 1.8 per cent to trade at $0.2595, Dogecoin (DOGE) went down by 1.5 per cent to $0.0920, Bitcoin (BTC) shrank by 1.2 per cent to $64,098.80, Litecoin (LTC) slipped 1.1 per cent to $51.31, Ripple (XRP) slumped 0.6 per cent to $1.35, and Ethereum (ETH) declined by 0.4 per cent to $1,857.75.
However, Solana (SOL) appreciated by 0.2 per cent to sell at $78.95. while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 each.
By Adedapo Adesanya
Oil depreciated on Tuesday after Iran said it was prepared to take any necessary steps to clinch a deal with the United States ahead of nuclear talks later this week, with Brent futures shedding 72 cents or 1.0 per cent to trade at $70.77 per barrel, and the US West Texas Intermediate (WTI) futures declining by 68 cents or 1.0 per cent to $65.63 a barrel.
Iran, the third-biggest crude producer in the Organisation of the Petroleum Exporting Countries (OPEC), and the US will hold a third round of nuclear talks on Thursday in Geneva, Switzerland.
America wants Iran to give up its nuclear programme, which the country has denied trying to develop an atomic weapon.
Meanwhile, Iran’s deputy foreign minister said on Tuesday that it was ready to take any necessary steps to reach a deal with the US.
However, the US State Department is pulling out non-essential government personnel and their families from its embassy in Beirut, Lebanon, as concerns mount about the risk of a military conflict with Iran.
The US has deployed a vast naval force near the Iranian coast ahead of possible strikes on the Islamic Republic. The American president, on February 19, said he was giving Iran about 10 to 15 days to make a deal.
Also, the US began collecting a temporary new 10 per cent global import tariff on Tuesday, but President Trump’s administration was working to increase it to 15 per cent, a development that has led to confusion after the country’s Supreme Court ruling.
On the supply front, trading houses and buyers of Venezuelan oil have chartered the first very large crude carriers to export from the South American country since a supply deal began between the US and Venezuela. This is set to speed up shipments from March while boosting deliveries to India.
The European Commission will submit a legal proposal to permanently ban Russian oil imports on April 15.
The American Petroleum Institute (API) estimated that crude oil inventories in the United States rose by 11.4 million barrels in the week ending February 20, after falling by 609,000 barrels in the week prior. Official data from the US Energy Information Agency (EIA) will be released later on Wednesday.
By Adedapo Adesanya
The Nigerian National Petroleum Company (NNPC) Limited is set to commence export of a new light, sweet crude grade known as Cawthorne from March 2026.
According to a report by Reuters, an NNPC spokesperson confirmed the development, describing it as part of efforts to increase output and consolidate Nigeria’s recent recovery in crude oil production.
The move aligns with Nigeria’s broader strategy to boost production after years of constraints caused by pipeline vandalism, crude theft, and unrest in oil-producing regions.
This follows the launch of two other new grades, Obodo in 2025 and Utapate in 2024, Nigeria, whic,h as Africa’s top oil exporter, seeks to strengthen its standing within the Organisation of the Petroleum Exporting Countries and its allies (OPEC+)
Cawthorne crude is scheduled for export in the third week of March and has an API gravity of 36.4, making it similar in quality to Nigeria’s Bonny Light, which is prized for high petrol and diesel yields.
According to Reuters, citing a trading source, the state oil national company issued a tender last week for cargo loading between March 24 and 25.
Analysts at Kpler noted that the new grade is expected to be exported via the Floating Storage and Offloading (FSO) vessel Cawthorne, which has a storage capacity of about 2.2 million barrels. The vessel is designed to enhance transportation and production from Oil Mining Lease (OML) 18 and nearby assets in the Eastern Niger Delta.
Kpler estimates that, based on storage capacity, Cawthorne could increase Nigeria’s crude and condensate output from roughly 1.65 million barrels per day to around 1.7 million barrels per day for the remainder of the year.
Nigeria’s crude oil production recently dropped from the OPEC+ quota of 1.5 million barrels per day, with output at 1.48 million barrels per day recorded in January, according to OPEC data.
Beyond increasing Nigeria’s crude offerings to the international market, the introduction of Cawthorne could also attract buyers seeking specific light, sweet crude qualities, buoy foreign exchange earnings, which would help strengthen government revenue and ease borrowing needs.
New crude grades are typically differentiated by sulfur content, API gravity, and production source, enabling producers to target specific refinery configurations and market segments.
In November 2024, NNPC officially launched the Utapate crude oil blend in the international market, describing it as a milestone for Nigeria’s export profile.
Earlier in July 2024, NNPC and its partner, Sterling Oil Exploration & Energy Production Company (SEEPCO), lifted the first 950,000-barrel cargo of Utapate crude, which was shipped to Spain.
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