Serrari Group

Private equity investments in Nigeria experienced a remarkable surge of 321.8% in the first quarter of 2024, propelled predominantly by significant transactions in the energy and educational technology (edtech) sectors. According to DealMakers Africa, these investments totaled $2.59 billion, a substantial increase from $614 million in the same period last year and surpassing the $1.76 billion recorded in Q1 2022.

This surge reasserts Nigeria’s prominence as a leading destination for private equity on the African continent, reclaiming its position after a temporary shift to Zimbabwe in the previous year. The report underscores Nigeria’s central role in West Africa’s overall transaction value of $2.6 billion, driven by 20 major deals.

The largest transaction involved Shell’s sale of its onshore assets to Renaissance Africa Energy for $2.4 billion, reflecting a strategic move by major international oil companies to optimize portfolios and focus on core operations.

Jens Kengelbach, managing director at Boston Consulting Group, highlighted Nigeria’s attractiveness to global acquirers, alongside emerging economies like Morocco, Egypt, and Kenya. This trend is bolstered by reforms and growing interest in sectors beyond traditional oil and gas, including renewable energy and infrastructure.

In parallel, foreign investments in Nigeria surged to a four-year high of $3.38 billion in Q1 2024, supported by Central Bank reforms aimed at enhancing market clarity and investor confidence amidst economic challenges.

The period also witnessed significant funding into innovative startups and initiatives. For instance, fintech platform Cleva secured $1.5 million in pre-seed funding, while Chapel Hill Denham allocated $7.4 million for d.light’s off-grid solar program.

Looking forward, Nigeria’s economic outlook remains optimistic, with continued growth expected in private equity and foreign investment across diversified sectors, supported by ongoing reforms aimed at strengthening the business environment.

Photo source: Google

By: Montel Kamau

Serrari Financial Analyst

9th July, 2024

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