Private Equity In Nigeria: Finally Coming Of Age?

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Data from African Private Equity and Venture Capital Association (AVCA) suggests that the West African region witnessed 267 Private Equity (PE) deals valued at $10.7bn between 2012 and 2017. Unsurprising, Nigeria accounted for 42% of the volume of the deals and a whopping 73% of the value of deals within the period, leading the region in both volume and value. Ghana came behind closely at representing 27% of deals volume and 20% of deals value in the sub-region.

These numbers are not surprising as the recent $350m private equity investment into JAPAULOIL, the flurry of PE firms that participated in the bid for 9mobile and the entry of Arkana Partners in 2017 which is proposing a $100m investment into Nigerian mid-cap companies, reflects the data.

The outlook for PE funding into the Nigerian market appears bright in 2018 as the country continues to offer a large untapped potential for PE firms amid prohibitive cost of borrowing and the increasingly challenging operating environment. This challenge offers PE firms the opportunity to intervene by using their technical competence to nurture budding mid-cap firms to turn them around, bridge the huge pre-IPO gap in the
country and serves as a catalyst for much needed FDIs into the country.

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