…Energy, mining, utilities record $7.8bn deals in Sub-Saharan Africa

Investors, representing 50 percent of respondents choose South Africa as a future investment destination in Sub-saharan Africa, over Nigeria with 30 percent respondents, according to the ‘Doing Deals in Africa’ report, by KPMG, a global leader in audit, tax, and advisory services.

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Nigeria is currently the top investment destination in sub-Saharan Africa, followed by South Africa according to some other reports.

These two countries are the largest economies in Africa, offering substantial market opportunities and, in the case of Nigeria, a significant consumer base, with the country boasting a population of more than 220m.

More than two-thirds (68%) of respondents expect deal activity to increase over the next two years, including 31 percent who think it will increase significantly.

South Africa and Nigeria are expected to see the lion’s share of this, being the top two destinations for future investments among those planning an acquisition in the region, as cited by 50 percent and 30 percent, respectively.

Energy, mining, and utilities (EMU) saw the highest aggregate deal value in 2022 at US$7.8bn. The sector also recorded the region’s highest deal volume at 64 deals in 2022, matching the total for 2021, the report stated.

SSA continues to be an attractive market to investors, primarily due to the region’s abundant natural resources and relatively attractive asset valuations compared with more developed, lower-risk markets.

Doing Deals in Africa Report, a comprehensive analysis of the latest trends and insights on the M&A landscape in Sub-Saharan Africa.

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“We are excited to launch the 1st edition of the Doing Deals in Africa report, which builds on decades of providing significant M&A advisory to large corporate and private equity clients on the continent,” said Ijeoma Emezie-Ezigbo, partner & head, transaction services at KPMG West Africa.

She said this report offers a guide on trends and drivers of deal activity, investors’ approach to deal making which will help organisations make informed decisions and seize opportunities in the dynamic world of dealmaking.

According to Ignatius Sehoole, CEO, KPMG Southern Africa and Africa Chairman, the sub-Saharan Africa region continues to present a compelling case for investment driven by key advantages of a large population, abundant natural resources, attractive asset valuations, among others, despite the macro challenges and recent spate of political volatility seen on the continent.

Government focus on initiatives and reforms aimed at improving the business and investment landscape also presents further optimism for the region.

The report highlights the diversity of the region which presents varying deal dynamics ranging from the types of opportunities available and drivers of the opportunities to the unique risks and challenges to investing across different markets, as represented in the regional lens adopted for key findings, said Dolapo Adeosun, partner, transaction services at KPMG West Africa.

This will allow investors and businesses to adapt their strategies according to the unique characteristics of each market in Africa. “We are thrilled to see this long-awaited publication come to completion,” said Mike Louw, M&A partner, deal advisory at KPMG South Africa, adding that “This comprehensive resource reflects KPMG’s unwavering commitment to fostering investment and growth opportunities on the African continent.

In a rapidly evolving business landscape, this publication serves as a vital guide for investors, showcasing deep insights into what is driving and influencing deal and investment decision-making across Africa and KPMG’s dedication to facilitating successful deals on behalf of our clients with our multi-disciplinary collaborative teams.”

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“KPMG is proud to unveil the 2023 Doing Deals in Africa Publication, a testament to our continued dedication to unlocking the potential of the African business landscape,” Julius Ngonga, partner, strategy & deal advisory, KPMG East Africa, said.

“This comprehensive guide reflects our commitment to empowering businesses with the knowledge and insights needed to navigate the ever-changing market dynamics and seize promising opportunities across the continent,” Ngonga further said.