Economy
Nigeria Records $204m Local, Cross-Border Deals in H1 2020
By Dipo Olowookere
Despite Nigeria recording more deals in the first half of 2020, the total value of the transactions went down to $204 million (N73.4 billion at N360/$1).
According to the latest Refinitiv M&A data released by Baker McKenzie, there were 26 deals in the period under consideration in contrast to 18 of the first half of last year, indicating a 44 per cent increase.
However, the report said the total deal value of the transactions, which comprised local and cross border, went down by 46 per cent to $204 million from $375 million in H1 2019.
Baker McKenzie explained that this decline in the total value of the deals was likely because most of the deals listed for H1 2020 have no disclosed deal value.
But it said the number of cross border deals increased by 18 per cent in comparison to the first half of 2019, while domestic deals were also up by 86 per cent year-on-year.
The firm noted that about 50 per cent of the mergers and acquisitions transactions in Nigeria were cross border transactions, totalling $40 million, noting that deals were evenly distributed among industries, with financials and high technology recording two inbound deals each and the industrials sector recording two outbound M&A deals.
The $21 million acquisition of Interporto di Venezia SpA in March 2020 by an Orlean Invest Holding subsidiary for $21 million was the biggest cross border deal in Nigeria in the first half of 2020, the report said.
According to the Head of Africa for Baker McKenzie in Johannesburg, Mr Wildu du Plessis, policy and economic uncertainty, including lack of access to foreign exchange, stalled dealmaking in Nigeria in recent years.
“However, the Central Bank of Nigeria (CBN) introduced a foreign exchange window a few years ago, allowing trading at market-determined rates, which boosted the supply of foreign exchange and encouraged dealmakers.
“The government was also looking at more business-friendly legislation. The Nigerian economy was already impacted quite severely by the disruption in oil markets in recent years, but COVID-19 has added extensive damage to the economy, and this will undoubtedly impact negatively on M&A numbers going forward,” he said.
For South Africa, the value of M&A transactions dropped 60 per cent to $3.3 billion in the first half of 2020, down from $8.2 billion for the same period last year (H1 2019).
Also, the volume of M&A deals in the country fell by 18 per cent year-on-year, with 132 transactions recorded in H1 2020, down from 160 in H1 2019.
Domestic M&A activity in South Africa dropped 18 per cent to 64 transactions, down from 78 in H1 2019. Domestic deals were valued at $1.7 billion in H1 2020, down 71 per cent year-on-year.
Cross border transactions reflected the same downwards trend, with M&A volume down 17 per cent to 68 deals, and deals valued at $1.5 billion in the first half of 2020, down 32 per cent from the same period last year.
It was observed that Barloworld’s acquisition of the equity assets of both Wagner Asia Group and SGMS LLC by its Mongolian subsidiary, for $212 million each, were the biggest cross-border transactions in South Africa in the first half of this year.
In the Sub-Saharan Africa (SSA) region, the report said M&A volume decreased 24 per cent to 254 deals, compared to 338 deals for the same period last year.
Also, the total value decreased by 56 per cent to $6.8 billion in the first half of 2020, compared to $15.3 billion in H1 2019, with majority cross border deals at 160 transactions worth $4.8 billion.
It said there were 89 inbound deals in the region during this period, valued at $1.1 billion. The primary target was the materials industry with 24 deals, totalling $305 million.
The United Kingdom and the United States were the primary investors with 17 and 15 deals, worth $161 million and $658 million, respectively.
The region also reported 49 outbound transactions worth $3.6 billion. The industrials sector was the most targeted with nine deals, while the materials and telecommunications sectors had the biggest deal values, totalling $1 billion each.
According to Mr Du Plessis, “There is broad consensus that 2020 and 2021 will be very difficult years across all sectors in Africa, with severe humanitarian challenges, reduced demand across most sectors, constrained domestic economic activity, weaker currencies, supply chain disruptions and increased regulations and restrictions causing business disruption.
“Some sectors will battle to recover while others, such as the technology sector, are likely to be better able to adapt and take advantage of current conditions.”
“M&A activity in Africa going forward could come from distressed M&A transactions. Buyers with strong market positions or balance sheets and an appetite for risk could seek to capitalise on the opportunities available in the most challenged sectors, such as retail, transport, energy, construction, hospitality and leisure, as well as the opportunities in the sectors that have performed well during the pandemic, such as those in technology and healthcare and Fintech.
“The oil & gas industry and non-core infrastructure sectors are also facing significant stress, which might produce opportunities for buyers.
“The bottom line is that there will be very few sectors who have not been badly affected by the pandemic, but this could produce opportunities for buyers who have done their homework and have an appetite for risk,” he added.
According to him, the current developments in terms of the continent’s trade relationships also point to improved investment opportunities in Africa in the medium term.
Shifting global trade patterns have seen the major players turn to Africa to find new avenues for trade and investment.
Examples include the recent Economic Partnership Agreements signed with the UK to govern bilateral trade with certain African countries after Brexit; China’s continued interest in Africa, especially in terms of the Belt and Road Initiative (which might endure short term slowdowns but offers long term gains in digital programmes and sustainability); the recent United States Africa strategy, which has a renewed focus on trade and investment between the two regions; the European Commission’s Comprehensive Strategy with Africa, published after COVID-19 and positioning the EU as an close ally of Africa; and the African Continental Free Trade Area agreement, postponed to 2021 due to COVID-19, and intended to streamline intra-African trade across the continent and reduce the continent’s dependence on foreign investors.
“So, while Africa, alongside the rest of the world, will be weathering the devastating effects of COVID-19 for some time, the future M&A forecast looks brighter, with good investment opportunities becoming clearer across the continent once the pandemic eases,” Mr Du Plessis noted.
In the report, Baker McKenzie said going forward, dark clouds remain over the M&A market in Africa in the short-term, with economic uncertainty likely to cause a reduction in foreign investment in Africa.
However, recent developments regarding Africa’s policies on trade and investment, and its renewed partnerships with major global economies, brighten the continent’s prospects for medium-term recovery, it submitted.
By Adedapo Adesanya
Manufacturers are yet to benefit from relief on the burden of multiple taxes and levies despite the enactment of the Nigeria Tax Act 2025, according to the Manufacturers Association of Nigeria (MAN).
The association, in its Manufacturers CEO Confidence Index (MCCI) report for the second quarter of 2026, said manufacturers continued to face multiple tax collectors and regulatory agencies during the period.
Director-General of MAN, Mr Segun Ajayi-Kadir, said the new tax law, which was expected to reduce the burden of multiple taxation, had yet to deliver the intended benefits.
“Manufacturers complained that they were still met with multiple tax collectors and regulators in Q2 2026. It follows that the implementation of the Nigeria Tax Act 2025 is yet to achieve its objective of relieving manufacturers of the burden of taxes and levies,” he said.
According to the report, Nigeria’s business environment remains largely unsupportive of manufacturing growth, with local sourcing of raw materials emerging as the only indicator that recorded noticeable improvement.
MAN, however, warned that the gains in local sourcing could be undermined by worsening insecurity in parts of the country.
The association attributed the improvement largely to persistent foreign exchange constraints, which have forced many manufacturers to source inputs locally.
Despite this, it said excessive regulation and multiple taxation continue to weigh heavily on manufacturers.
The report showed that manufacturers recorded a modest increase in sales volume during the second quarter, but rising production, distribution and logistics costs continued to erode profitability.
It added that capacity utilisation, production levels, investment and employment remained broadly unchanged during the review period.
MAN further observed that although recent foreign exchange reforms had helped stabilise the naira, inadequate foreign currency supply remained a major constraint to manufacturing operations.
Other key challenges identified in the report include poor infrastructure, high production costs, raw material shortages and unfavourable trade policies.
The association said the findings underscore the continued pressure on manufacturers despite recent fiscal and foreign exchange reforms, stressing the need for more effective implementation of policies aimed at improving the operating environment for the real sector.
By Adedapo Adesanya
The federal government spent N3.14 trillion on servicing its domestic debt in the first quarter (Q1) of 2026, according to the Debt Management Office (DMO).
The figure, contained in the DMO’s latest domestic debt service report for Q1 2026, comprised N2.97 trillion in interest payments and N169.68 billion in principal repayments.
According to the report, the government spent N741.82 billion on domestic debt service in January before the figure rose to N967.67 billion in February.
Debt service increased further to N1.43 trillion in March, bringing total spending for the quarter to N3.14 trillion.
The March figure represented a 47.7 per cent increase from the N967.67 billion recorded in February and was 92.7 per cent higher than the N741.82 billion spent in January.
The debt office said interest payments accounted for approximately 94.6 per cent of the total domestic debt service during the quarter.
Treasury bills accounted for the largest share of interest payments at N1 trillion, while interest payments on Federal Government bonds stood at N1.96 trillion.
The government also paid N4.24 billion in interest on FGN savings bonds during the period.
The debt management body said the principal component of the debt service comprised N169.68 billion in repayments on local-denominated promissory notes.
Overall, domestic debt service rose significantly throughout the quarter, with March alone accounting for nearly half of the N3.14 trillion spent between January and March.
By Aduragbemi Omiyale
The Director-General of the Securities and Exchange Commission (SEC), Mr Emomotimi Agama, has outlined how the Federal Capital Territory Administration (FCTA) can leverage Nigeria’s capital market to raise long-term funds for critical infrastructure projects instead of relying solely on annual budgetary allocations.
According to Mr Agama, the capital market offers the FCT a sustainable financing model for roads, rail, housing, water, transport and other infrastructure through instruments such as infrastructure bonds, green bonds, real estate investment trusts (REITs), asset recycling and tokenised municipal securities.
Speaking at the Abuja Business and Investment Summit and Expo (ABIE 2026) in Abuja, the SEC chief noted that Abuja’s development demonstrates that economic growth is driven by investment, stressing that “cities are not built by budgets alone. Cities are built by capital markets.”
He advised the FCT to establish a long-term infrastructure bond programme backed by dedicated revenue sources such as ground rents, tenement rates, tolls, parking fees and land-use charges, noting that this would enable the territory to finance major projects without overburdening annual budgets.
“A budget can only spend what a single year has collected. A bond can spend what 30 years will collect,” Mr Agama said, explaining that infrastructure projects generate long-term economic value that can be used to service debt over time.
The SEC boss said the territory could also access cheaper financing through green and sustainability-linked bonds for projects including mass transit, light rail, solar-powered street lighting, waste-to-energy facilities and water infrastructure.
He further proposed the creation of an FCT Real Estate Investment Trust to unlock value from Abuja’s extensive property portfolio while giving ordinary Nigerians an opportunity to invest in the city’s real estate market.
Mr Agama also urged Abuja Investments Company Limited (AICL) to consider listing some of its businesses or establishing a listed infrastructure fund, saying this would raise capital without increasing government debt while improving corporate governance and transparency.
On the long-abandoned Millennium Tower project, he said the estimated over N400 billion completion cost should not be viewed as a budgetary burden but as an investment opportunity that could be financed through a special purpose vehicle and offered to investors via the capital market.
“The question is not whether Nigeria can afford the Millennium Tower. The question is whether we will let ordinary Nigerians own it,” he said.
Mr Agama further proposed an asset recycling programme under which completed income-generating public assets, including terminals, markets, commercial properties and the International Conference Centre, could be securitised or concessioned to institutional investors, with proceeds reinvested in new infrastructure.
He also called on the FCT to pioneer a regulated tokenised municipal bond programme that would allow citizens to invest as little as N10,000 through mobile phones in specific infrastructure projects.
According to him, the recently enacted Investments and Securities Act (ISA) 2025 has strengthened the legal framework for sub-national governments to access the capital market while providing enhanced investor protection and clearer regulation of digital assets.
Mr Agama disclosed that Nigeria’s capital market has grown significantly, with total market capitalisation exceeding N217 trillion as of May 2026, comprising about N160.5 trillion in equities and N56.7 trillion in bonds.
He said recent reforms, including the migration to a T+1 settlement cycle and regulatory measures to deepen market participation, have improved market efficiency and strengthened investor confidence.
The SEC DG assured the FCTA of the commission’s readiness to provide technical support for structuring and registering capital market instruments, saying the agency would work closely with the territory to unlock financing for infrastructure projects.
He added that Nigeria’s capital market remains critical to mobilising domestic savings for national development, insisting that “money is not scarce; delivery capacity is scarce, and financing follows delivery capacity.”
