DealMakers AFRICA Q1 2023
FROM THE EDITOR'S DESK
The total value of deals captured (excluding South Africa) for Q1 2023 was US$3,63 billion, almost a third of the value of that reported for the same period in 2022. Of the 123 deals captured, 38% of activity was recorded in East Africa – specifically, in Kenya – followed by West Africa, led by Nigeria with 28% of the Q1 M&A activity (page 3).
This is compared with $1,34 billion (139 deals) over the same period, a year ago. According to Africa: The Big Deal, the amount raised by start-ups in the first four months of 2023 is less than half of what it was at the same time back in 2022, with healthcare being the only sector recording positive year-on-year growth, contrasting with the steep decline almost everywhere else. If the continent’s economies are to return to the unprecedented growth seen in the two decades leading up to COVID, then focus should be on ensuring that startups have the support and conditions needed to help fuel the next wave of growth. Africa, with 60% of its population under the age of 25, is ripe to embrace new technologies, particularly if they address the socioeconomic problems faced.
The largest deal by value (page 6) was the acquisition by China Natural Resources (CNR) of the Williams Minerals lithium mine in Zimbabwe for $1,75 billion from Chinese investment company Feishang Group and Top Pacific (China). The deal is a strategic move by CNR to meet the rising demand for a safe and reliable resource of lithium in a global market where the appetite for renewable energy continues to grow. Unsurprisingly, with the world focused on goals to reduce carbon emissions toward a clean energy future, five of the top six deals by value for the quarter
fall into the energy/resources sector. The growing role played by development finance institutions in assisting the continent’s transition is detailed in the Thorts section (page 34). Also featured in this issue is a new addition: the Corporate Law Digest will provide important developments in Kenya on
a quarterly basis.
The colourful pages in this issue showcase the return of the DealMakers AFRICA annual awards held in Nairobi in March. The evening was one of celebration and networking – a wonderful catch-up after an absence of two years, brought about by the pandemic. In the latter part of Q3, it is our hope to visit Lagos ahead of the next annual awards event, which will be held in Nigeria.
The increasing importance of private equity (PE) investment on the continent has been highlighted for some time, and the decrease in M&A activity for the first quarter of 2023 is directly aligned with the fall off in PE investment for the period. There were 74 PE deals captured for Q1 2023, with a reportable value of $562,6 million (reportable because the value of many of these deals is undisclosed), constituting 60% of all M&A activity for the quarter.