General
The Impact of COVID-19 on Finance and Investment in Africa
By Morne van der Merwe and Wildu du Plessis
The Coronavirus (COVID-19) has resulted in mass production shutdowns and supply chain disruptions due to port closures in China, causing global ripple effects across all economic sectors in a rare “twin supply-demand shock”.
With South Africa having just reported its first cases of COVID-19, Africa is beginning to feel its full impact and plans to control and manage the humanitarian challenges of the virus are underway across the continent.
Economically, the effects have already been felt – demand for Africa’s raw materials and commodities in China has declined and Africa’s access to industrial components and manufactured goods from the region has been hampered. This is causing further uncertainty in a continent already grappling with widespread geopolitical and economic instability.
The number of cases is reportedly slowing down in China, increasing expectations that it will eventually reach a plateau and be brought under control. However, in early March the Organisation for Economic Co-operation and Development noted that “annual global GDP growth is projected to drop to 2.4% in 2020 as a whole, from an already weak 2.9% in 2019, with growth possibly even being negative in the first quarter of 2020”, with global markets plunging in the days thereafter.
Although Chinese growth will fall in the short term, it is expected to rebound quickly, some suggesting this could even happen in the second quarter of 2020 when the virus will hopefully be contained. In the meantime, central banks are implementing measures to mitigate the effects of the virus on the economy, cutting interest rates and injecting liquidity into the banking systems in some countries.
In early March, the World Bank announced it would commit $12 billion in aid to developing countries to help them to deal with the impact of the virus and limit its spread.
The bank said it would prioritise the most at-risk countries. The World Bank also introduced a pandemic bond in 2017, which, as part of the Pandemic Emergency Finance Facility intended to provide money to help developing countries in the event of a pandemic reaching certain thresholds and conditions. So far, these criteria have not been met and the bond has not paid out.
Uncertainty regarding the spread of COVID-19 is high and its impact on Africa is expected to be serious, given the continent’s exposure to China. So far, cases have been reported in Algeria, Cameroon, Egypt, Morocco, Nigeria, Senegal, South Africa, Togo and Tunisia. If there is a widespread outbreak of COVID-19 in Africa it could overwhelm already weak healthcare systems in the region.
According to ratings agency, Fitch, the Coronavirus outbreak will have a downside risk for short term growth for sub-Saharan African growth, particularly in Ghana, Angola, Congo, Equatorial Guinea, Zambia, South Africa, Gabon and Nigeria – all countries that export large amounts of commodities to China.
Impact on Merger & Acquisition activity
Africa has come through a period of prolonged political and economic uncertainty, but signs of future economic improvement, were pointing to a modest increase in M&A activity in Africa over the next few years. COVID-19 is likely to hamper this predicted upturn and result in increased short-term uncertainty in terms of how it will affect investment opportunities in Africa, the continent’s productivity and consumer demand.
There are other transactional risks. If the virus spreads rapidly in Africa, countries might have to introduce similar measures to those taken in China where areas were locked down, factories were shut, quarantines enforced and travel bans imposed.
As such, these events could potentially be significant enough to trigger a change to the terms of an M&A transaction currently in progress, and deals could be delayed as a result. COVID-19 conditions could also cause delays to M&A due diligence, necessary for a transaction to progress to finalisation. Further, the virus could qualify as a force majeure event causing more delays or terminations.
We are hopeful the rebound from COVID-19 will coincide with the implementation of the African Continental Free Trade Area (AfCFTA) in July 2020, which should provide an additional boost to deal activity in Africa the coming years. The AfCFTA is the first continent-wide African trade agreement, with the potential to facilitate and harmonise trade and infrastructure development in Africa. This boost to the investment environment will be welcome after the additional uncertainty of dealing with COVID-19 impacts.
Impact on Capital raising and IPOs
African issuers have been waiting several years for an improvement to political and economic instability in Africa before going ahead with any planned capital raising. As a case in point, Baker McKenzie’s Global Transactions Forecast showed that there were no IPOs in South Africa in 2019.
Also eroding investor confidence were the numerous global trade tensions, with capital raisers watching for signs of resolution before launching IPOs. With Africa looking to benefit from new global and regional trade agreements, the forecasts had been pointing to a potential recovery in capital markets in the next few years, but this might be delayed as the uncertainty around the impact of COVID-19 in Africa reaches its peak.
IPOs in the region are therefore expected to decline, not directly because of the virus as is the case with equities, but because COVID-19 will have an effect on the underlying business case for IPO companies, which will impact on their ability to raise capital
Impact on financial institutions
Global financial institutions are currently assessing the impact of COVID-19 and reacting to its economic impact, ensuring they are able to adjust to new and unprecedented circumstances brought about by the virus. It remains to be seen whether the huge global economic downturn caused by decreased output in China will impact on African lenders and compel financial institutions on the continent to be more lenient towards borrowers and cut them some slack.
Impact on Local Markets
Since global economic growth is a key driver of commodity prices, local prices have been driven down by the virus’s global impact. The uncertainty of the impact of COVID-19 on local markets is expected to lead to increased risk aversion from investors who are waiting to see its potential impact in Africa. On the plus side, a temporary fall in share prices provides opportunities for prudent investors.
Impact of the Insurance sector
Both businesses and individuals in Africa might find they are uninsured for any COVID-19 impacts as losses related to an epidemic or pandemic would usually not be covered in insurance policies, irrespective of whether the insurance covers business interruption, property damage, product losses or personal life and non-life insurance or even travel insurance.
As COVID-19 is a new disease, it would not have been specifically listed in existing insurance contracts. Many business interruption policies will include clauses for extended damage, but it is unlikely that these extensions will provide coverage under the current circumstances. As such, the wording of policies should be carefully checked.
Some insurance companies who provide cancelled event coverage that specifically includes references to epidemics or pandemics could be impacted. Reuters reported that financial services firm Jefferies estimated the insured cost of the Tokyo Olympics to be around USD 2 billion – including television rights, hospitality and sponsorship.
Morne van der Merwe, Managing Partner, and Wildu du Plessis, Head of Africa, Baker McKenzie Johannesburg
By Adedapo Adesanya
The Nigerian Content Development and Monitoring Board (NCDMB) has intensified its compliance drive in the oil and gas midstream segment, convening a high-level sensitisation workshop aimed at deepening adherence to the Nigerian Oil and Gas Industry Content Development Act.
The workshop, themed Compliance with the Provisions of the NOGICD Act 2010: A Pathway to Industrialization, held in Lagos, drew key operators across gas processing, transportation, storage and infrastructure development.
Speaking on behalf of the Executive Secretary of NCDMB, Mr Felix Ogbe, the Director of Monitoring and Evaluation Division, Mr Omomehin Ajimijaye, described the midstream sector as “a critical bridge between upstream production and downstream utilisation.”
“The midstream segment plays a pivotal role in gas processing, transportation, storage and infrastructure development, all of which are essential pillars for achieving Nigeria’s industrialisation agenda,” Mr Ajimijaye said.
Mr Ajimijaye stressed that adherence to the NOGICD Act goes beyond regulatory obligation.
“Compliance with the NOGICD Act is not merely a statutory requirement,” he stated. “It is a strategic imperative for sustainable national development.”
He explained that the programme was structured to clarify registration processes, Nigerian Content Equipment Certification, expatriate quota requirements, statutory reporting templates and submission timelines.
“Our objective is to deepen stakeholders’ understanding of compliance requirements, address recurring gaps identified during Monitoring and Evaluation reviews, and foster constructive dialogue on operational realities within the midstream space,” he added.
According to Mr Ajimijaye, the board has received feedback from operators highlighting challenges in meeting Nigerian Content obligations, including reporting complexities and varying interpretations of certain provisions of the Act.
“As a responsive regulator and development-focused institution, we remain committed not only to enforcing compliance but also to providing guidance, clarity and the necessary support to enable stakeholders succeed,” he assured participants.
With Nigeria positioning gas as a transition fuel and economic growth driver, regulatory clarity in the midstream space is essential to unlocking investment and local capacity development.
The participants received technical presentations from key NCDMB divisions, including: Monitoring and Evaluation Division, Project Certification and Authorisation Division, Capacity Building Division and Zonal Coordination Division.
The interactive sessions provided practical guidance on engagement protocols with the Board and strengthened collaboration between regulators and operators.
By Adedapo Adesanya
The Minister of Justice and Attorney General of the Federation, Mr Lateef Fagbemi, has taken over the prosecution of his immediate predecessor, Mr Abubakar Malami.
Mr Malami is facing terrorism and illegal firearms possession charges brought against him by the Department of State Service (DSS).
Mr Fagbemi, a Senior Advocate of Nigeria (SAN), took over the trial from the secret police on Wednesday at the Federal High Court in Abuja.
The Director of the Public Prosecution of the Federation, Mr Rotimi Oyedepo, announced the Attorney General’s appearance in the matter.
Mr Oyedepo told Justice Joyce Abdulmalik that the trial cannot proceed because Mr Fagbemi has just taken over the prosecution.
He informed the court that the prosecution needed more time to familiarise itself with the facts of the case.
Counsel to the defendants, Mr Adedayo Adedeji, who did not oppose the application, however, urged the court to strike out the matter if the prosecution fails to open its case at the next adjourned date, citing lack of diligent prosecution.
Justice Abdulmalik subsequently adjourned the matter to March 10 for trial and for the prosecution to formally open its case.
The court had, on February 27, admitted Malami and his son, Mr Abdulaziz, to N200 million bail, with two sureties, each one of whom must own landed property either in Maitama or Asokoro.
Justice Abdulmalik had said that the title of the property must be deposited with the Deputy Chief Registrar of the Court along with valid international passports.
The sureties were also ordered to depose to an affidavit of means and submit their two recent passport photographs to the court.
Mr Malami and his son were also ordered to submit their international passports and recent passport photographs to the court.
The DSS had arraigned the ex-AGF and his son, Mr Abdulaziz, on a five-count charge bordering on terrorism and illegal firearms possession.
In the charge, marked FHC/ABJ/CR/63/2026, filed before the Federal High Court in Abuja, Malami is also accused of refusing to prosecute suspected terrorism financiers, whose case files were handed to him while he served as the AGF and Minister of Justice.
Mr Malami and Mr Abdulaziz are equally accused of warehousing firearms in their residence at Gesse Phase II Area, Birain Kebbi LGA, Kebbi State, without lawful authority.
The DSS accused Mr Malami in count one of the charge, with knowingly abetting terrorism financing, while the ex-AGF and his son are charged in counts two to five, with unlawful, possession of a Sturm Magnum 17-0101 firearm, 16 Redstar AAA 5720 live rounds of cartridges and 27 expended Redstar AAA 5’20 cartridges, contrary to and punishable under relevant Sections of Terrorism (Prevention and Prohibition) Act, 2022 and Firearms Act, 2004.
By Adedapo Adesanya
The Nigerian Ports Authority (NPA) has announced a significant 24.8 per cent increase in total cargo throughput for 2025.
According to the NPA’s 2025 Operational Performance Report, total cargo throughput rose from approximately 103.6 million metric tons in 2024 to over 129.3 million metric tons in 2025.
The report identified Lekki Port as Nigeria’s leading port, accounting for 40.6 per cent of the nation’s total cargo throughput. Onne Port followed with 19.1 per cent, while Apapa Port handled 16.7 per cent.
Beyond volume, Lekki Port also received the largest vessels, recording an average Gross Registered Tonnage (GRT) of 55,712, slightly higher than Onne Port’s 53,022 GRT.
Apapa and Tin Can Island ports recorded average vessel sizes of 33,251 GRT and 36,909 GRT, respectively, while Delta Ports handled vessels averaging 17,414 GRT.
Although Tin Can Island Port recorded the highest frequency of ship arrivals, accounting for 22.7 per cent of total ship calls, Lekki and Onne are increasingly attracting larger “heavyweight” vessels, strengthening Nigeria’s capacity to handle higher-value cargo.
The data showed that imports continued to dominate cargo traffic, and the report highlighted a steady rise in outward trade. Exports accounted for 39.0 per cent of total cargo throughput, while inward traffic represented 59.2 per cent.
Containerised cargo, widely regarded as a key indicator of trade activity, recorded substantial growth. Total container traffic increased by 25.7 per cent, surpassing 2.1 million Twenty-foot Equivalent Units (TEUs).
Import-laden containers surged by 32.8 per cent, while export containers rose by 3.1 per cent. Notably, transhipment containers recorded a remarkable 205.8 per cent increase, positioning Nigeria as an emerging regional logistics hub serving West and Central Africa.
Liquid bulk cargo, including petroleum products and chemicals, remained the dominant commodity category, accounting for 54.7 per cent of total cargo, while containerised cargo represented 24 per cent.
Speaking on the report, the Managing Director of NPA, Mr Abubakar Dantsoho, described the 2025 performance as a historic milestone.
“Nigeria’s maritime sector recorded a historic surge in activity in 2025, driven by increased cargo throughput, rising container traffic, and a growing export footprint. This underscores the Federal Government’s commitment to economic diversification,” he said.
Looking ahead, Mr Dantsoho expressed confidence that the Federal Government-approved port modernisation programme and the implementation of the National Single Window system would power the next phase of growth.
The comprehensive modernisation initiative aims to rehabilitate ageing infrastructure, deepen berths, upgrade quays, expand cargo-handling capacity, and deploy advanced digital solutions across Nigeria’s ports.
The reforms are expected to reduce vessel turnaround time, cut cargo dwell time, improve safety standards, and boost overall operational efficiency.
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