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 Modupe Gbadeyanka
On Wednesday, April 22, 2026, the Future of Commerce Summit 2.0, put together by a leading technology platform, Glovo, will take place at the Landmark Events Centre, Victoria Island, Lagos.
Government stakeholders, policymakers, entrepreneurs, industry leaders, and innovators will gather for the second time to explore emerging trends, opportunities, and challenges shaping the commerce and logistics landscape.
At the inaugural edition last year, participants across Nigeria’s technology, digital, and commerce ecosystems had a meaningful dialogue on the future of commerce and innovation in the country.
A statement from the organisers assured that this year’s programme would be bigger and better as it would spotlight the role of digital platforms in driving economic growth, empowering small and medium-sized businesses (SMBs), and accelerating Nigeria’s digital transformation.
Speaking about the planned summit, the Interim General Manager of Glovo Nigeria, Ms Reni Onafeko, said that the event reflects the company’s commitment to empowering small and medium-sized businesses (SMBs), which are widely regarded as the backbone of Nigeria’s economy, with access to tools, insights, and digital infrastructure.
She explained that Future of Commerce 2.0 will focus on scaling impact across Nigerian cities, leveraging technology to drive inclusive growth and expand access to digital commerce opportunities.
“At Glovo, we are deeply committed to empowering local businesses and creating opportunities for SMBs to thrive in an increasingly digital economy. Nigeria’s commerce ecosystem is evolving rapidly, driven by innovation and a new generation of entrepreneurs.
“The Future of Commerce Summit 2.0 reflects our vision of fostering collaboration and equipping entrepreneurs with the tools and insights needed to scale sustainably.
“Through this platform, we aim to amplify the voices of businesses and drive impactful conversations that will shape the future of commerce in Nigeria,” Ms Onafeko noted.
By Aduragbemi Omiyale
President Bola Tinubu has assured that his government would uphold the tenets of democracy, including the rule of law, the separation of powers and the rights of all citizens.
He gave this assurance on Thursday when he received a delegation of the Renewed Hope Ambassadors led by Governor Hope Uzodimma of Imo State at the State House in Abuja.
He used the occasion to also reaffirm his commitment to building a stable, peaceful, and prosperous nation, assuring that the well-being of Nigerians remains his top priority, stating that the political and economic structures that have long undermined the citizens’ prosperity are being steadily replaced through the realignment of the economy to enable full participation.
“We cannot submit to disobedience of a lawful order of the court; we must embrace the judiciary, whether it favours us or not. We submit to this principle of democracy, separation of powers, and understanding of the dynamics of it, and the nationhood that Nigeria is, that we must build one country. That’s what Renewed Hope is all about. You must give them that hope.
“There’s no other path for us to attain national greatness other than to build one common vision for the progress and prosperity of our people. That is what we must do,’’ Mr Tinubu stated.
The President charged the group to continue sensitising and mobilising citizens, especially at the grassroots, on the government’s efforts to improve their livelihoods through economic reforms.
“You represent the conscience of a nation that wants to break the shackles of poverty and hopelessness,” he disclosed at the event, which also had in attendance Vice President Kashim Shettima and the National Chairman of the ruling All Progressives Congress (APC), Mr Nentawe Goshwe Yilwatda.
Mr Tinubu reiterated that his government is guided by a clear vision to foster inclusive growth, create opportunities for youth, and ensure that every Nigerian—regardless of background or region—has a stake in the country’s future.
He encouraged citizens not to be discouraged by the misinformation championed by the opposition elements in the country, saying the great accomplishments witnessed in modern times were achieved through visionary leadership, assuring that Nigeria is in safe hands.
To the opposition, he said: “They want to scare me off? It’s a lie. I’ve been through this path before. And if I have to come back over and over and over again, I’ll do the same thing.
“There is no better place than your own country. And no one can build it except you. We saw great things, skyscrapers. We wonder how the plane takes off and flies us from one destination to another. There was no magic of yesterday. It is the thinker of tomorrow and the future that can elevate life, that can reform us all.
“And being the transformative leaders that you are, you are in good company. Don’t be afraid. I’ve listened to you. I didn’t have to look back on the economy because the truth is, I took over from myself. The late Buhari was me. He was my partner.
“And if I took over from him. Is that not from me? So, if something is wrong, fine. Live with it, correct it, move on. The life voyage is not going to be easy. I can only stand before you and say you will not regret it. That is why we ask you to renew their hope.
“If they don’t want to see the hope and the roads and bridges, and the children we raise, the economy we are growing, we shall lend them Jigi-Bola, eyeglasses. One thing that you need from me is a promise that I won’t run away from the affair. With you, the deal is done.”
Turning to the Renewed Hope Ambassadors, President Tinubu promised to be their greatest champion, noting that, “We act as one family. You represent a conscience, a nation that wants to break the shackles of poverty, ignorance, and hopelessness. You are in a good company. That’s all I can say. And all I can promise is I won’t give up.”
By Adedapo Adesanya
Nigerians continue to seek alternative power sources, primarily solar, causing the consumption of Premium Motor Spirit (PMS), also known as petrol, to fall by 16.9 per cent in March 2026.
Prices of the petroleum products have been up since last month as a result of the US-Israel attack on Iran and its blowback.
According to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), daily petrol consumption dropped from 56.9 million litres in February to 47.3 million litres in March, marking one of the steepest month-on-month declines in recent times.
This fall is significant not just for its size, but for what it signals in a country where petrol has long remained the dominant fuel for transport and off-grid electricity generation, which has been epileptic.
The drop of over 9 million litres per day suggests that households, transport operators and small businesses had to adjust their consumption patterns in response to sustained fuel price pressure, which rose to as high as N2,000 in some parts of the country, following the blockade of the Strait of Hormuz.
At the same time, total PMS supply rose marginally from 39.5 million litres per day in February to 40.1 million litres in March, representing a 1.5 per cent increase. This contrast between rising supply and falling demand points to a market that is not constrained by availability but increasingly shaped by affordability and substitution effects.
Prices of petrol in Nigeria typically rise due to global market conditions since the government removed fuel subsidy, which led to changes in the cost of buying the fuel weekly.
Also, Dangote Refinery, which handles a chunk of Nigeria’s domestic supply, relies on international markets to get crude feedstock due to shortages from the Nigerian National Petroleum Company (NNPC) Limited. This comes into play when pricing for the local market.
Also, the March figures could suggest rising renewable energy adoption as residential estates, businesses and commercial buildings are gradually expanding, driven largely by the need to escape rising diesel and petrol costs.
However, adoption is slow because of how expensive a solar power setup is, with the cost running into millions of Naira.
Energy experts told Business Post that, beyond cost, there are several factors, such as holding false beliefs as well as a lack of energy management.
Mr Danieel Anomfueme, a Port Harcourt-based solar expert, told this newspaper, “While going solar is a much better alternative to fuel-based generation (napkin maths puts it at ~3 years fuel cost ), most can’t make the move because they lack the upfront money. While there are solar financing companies, the credit cost and options don’t make it attractive.”
“We are wasteful energy-wise because we grew up with it being heavily subsidised electricity, and we don’t bother to know about energy conservation or efficiency of appliances. This is why someone will be spending 400k+ monthly on band A, but expect their “#6m setup” to power all those appliances 24/7 daily,” he added.
For the expert, interested Nigerians can design a solar setup, have an overview of it and get to build it up little by little as the money comes.
“They don’t have to deploy everything at once.”
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