25 March 2019

Nigeria: Survey - Consumer Goods, Financial Services Most Attractive Sectors in Nigeria

KPMG Nigeria, one of the biggest professional services firms in the country recently unveiled the second edition of its 'Doing Deals' report which showed that Nigeria remains an attractive destination for investors seeking sustainable growth opportunities within the continent. Precisely, it revealed that the consumer goods, financial services, energy, mining and utilities, telecommunication, media and technology and business services sectors accounted for about 88 per cent of investments in the country in the last two years.

The report titled: 'Doing Deals in Nigeria 2019 - Key Insights from Dealmakers,' was the result of a survey of 50 senior business executives working in global companies which have a presence in Nigeria and have completed at least one acquisition in Nigeria in the last four years.

According the report, seventy per cent of the respondents were strategic investors while 30 per cent were financial investors with 66 per cent resident abroad and 34 per cent being indigenous respondents.

Partner and Head, Deal Advisory and Private Equity, KPMG in Nigeria, Dapo Okubadejo, explained that the focus for the report was, "on investors who not only provide capital but have a presence in Nigeria. These respondents are able to provide a lot more feedback in terms of their local experiences, thereby giving a more robust feedback than the First Edition."

The report also provided potential investors with insights into how best to do deals in Nigeria, leveraging the experiences of people who have been through the process and completed transactions.

The Partner, Deal Advisory, KPMG in Nigeria, Ijeoma Emezie-Ezigbo, noted that the survey findings focused on three parts - the case for Nigeria, deal dynamics and key deal drivers.

Emezie-Ezigbo, noted that, "the survey reiterates that Nigeria is still one of the most compelling M&A markets in Africa."

"Based on the findings, Nigeria will continue to be open for business and attractive to investors in the long term, with investors expecting consumer goods, financial services and pharma, medical and biotech to be the top three attractive sectors over the next four years.

"This is largely similar to the first edition, however, healthcare comprising pharma, medical and biotech improved significantly, from ranking seventh in the last survey, to third sector in terms of attractiveness.

"With respect to deal dynamics, the target's customer base continues to be the most important consideration in target selection for investment.

"On the other hand, IP/technology and regional distribution channels are also important considerations, based on investors' response in this edition.

"In view of our recent economic recession, it is not surprising that economic volatility ranked number one as the most important challenge to investing in Nigeria, unlike last year, where the survey found the lack of physical infrastructure to be the single most important challenge to investing in Nigeria.

"As investors navigate through the challenges of Doing Deals in Nigeria, it is noteworthy that the most important aspect of due diligence they believe they could have done better is 'to allocate more resources to the transaction evaluation process," she explained.

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