Nigeria comes second in 2022 mergers & acquisitions deals in SSA – KPMG

By Kingsley Odii

Recent data from KPMG has shown that South Africa emerged as the leading destination for mergers and acquisitions (M&A) deals in Sub-Saharan Africa, while Nigeria came second.

Surprisingly, South Africa surpassed Nigeria, known for its population of over 200 milli on, in attracting foreign investment and capital.

The report, titled “Doing Deals in Sub-Saharan Africa”, analyzed the volume of deals, the macroeconomic state of the region, and its attractiveness to global investors. Out of the top ten mega-deals in the region, five were conducted in South Africa, while Nigeria accounted for two. Other countries, including Tanzania, Cameroon, and Angola, secured one spot each in the top ten.

According to the report, South Africa was the source of five out of the ten largest deals by value seen in Sub-Saharan Africa in 2022. The survey conducted by KPMG also revealed that 50% of respondents favored South Africa as the top destination for future investment, followed by Nigeria with 30% of the votes.

Energy and mining deals dominated the M&A landscape in the region, with a total of 297 deals valued at $19.2 billion in 2022. The energy and mining industry alone accounted for 64 transactions, generating a whopping $7.8 billion for the region.

South Africa especially stood out in the energy and mining sector, with two significant mega-deals contributing to the country’s presence in the list of the top 10 M&A deals in 2022.

The report highlighted Africa’s vast mineral reserves, estimating that the continent holds approximately 30% of the world’s mineral reserves, 12% of its oil reserves, and 8% of its natural gas reserves.

Countries such as South Africa, Botswana, and the Democratic Republic of Congo are prominent producers of gold, diamonds, platinum, cobalt, and uranium, making the region highly attractive for strategic investors.

Apart from the energy and mining sectors, technology, media, and telecom (TMT) sectors, as well as financial services, also garnered notable interest in deal-making activities throughout Sub-Saharan Africa.

However, the total deal value for TMT targets in the region in 2022 was surprisingly lower compared to other sectors.

The report projected that in the next two years, South Africa and Nigeria will continue to dominate the M&A scene in Sub-Saharan Africa.

KPMG’s survey of potential investors showed that 50% of investors are looking towards South Africa, while 30% are focusing on doing deals in Nigeria. Despite the promising M&A landscape, the report highlighted challenges that continue to deter potential investors in the region.

Political instability, corruption, and macroeconomic volatility were cited as the biggest hurdles to overcome when completing deals in Sub-Saharan Africa.


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