Kenya dethrones Nigeria as Africa's top M&A market by value, jumps 671%

Kenya has overtaken Nigeria as Africa's top mergers and acquisitions market by value in the first half of the year, surging 671 percent to claim the continent's number one spot. Nigeria, which had ranked first by M&A value four times in the past six years, saw its deal value plunge 88.9 percent to $105.8 million, its lowest level in nearly a decade, even as it recorded Africa's highest number of transactions.

Kenya's rise to the top

The surge lifted Kenya five places from sixth position in H1 last year. The country recorded 25 deals, compared with Nigeria's 39, but attracted almost eight times Nigeria's deal value. According to DealMakers Africa, the South African-based firm that tracks M&A and corporate finance activity across the continent, Kenya, Nigeria, Egypt and Morocco were the biggest drivers of African deal activity in the first half.

Across the continent, excluding South Africa, M&A value fell 10 percent year-on-year to $5.58 billion, while transaction volumes declined 13 percent to 166 deals.

“Strategic investors continued to pursue long-term growth opportunities despite a more measured global investment environment, but geopolitical developments have heightened uncertainty and prompted buyers and investors to adopt a more cautious approach to transactions in the region,” said Marylou Greig, editor at DealMakers Africa.

Kenya's strong performance reflects a concentration of large transactions across banking, financial technology and other strategic sectors. Banking consolidation, regulatory changes and renewed investor interest in the region have supported the country's M&A market in the past two years.

“The country's M&A market is not in a quiet period,” said Thomas Louis Advocates, a Nairobi-based boutique law firm specialising in fintech, corporate law and digital assets.

One of the biggest transactions in the H1 data was South Africa's Nedbank's proposed acquisition of a 66 percent stake in NCBA Group, valued at about $855 million. DealMakers identified it as the second-largest deal announced on the continent in Q1. KCB Group also moved to acquire a majority stake in fintech firm Riverbank Solutions.

Nigeria's volume without value

Nigeria recorded 39 M&A deals in H1, the highest number in Africa and up from 31 a year earlier. Yet the value of those transactions fell by almost 89 percent to $105.8 million. The country had ranked first by M&A value in H1 2021, H1 2022, H1 2024 and H1 2025. It fell to ninth this year as investors continued to transact but committed less capital to individual deals.

The result shows that Nigeria's problem is not a complete loss of investor interest but a shortage of large transactions. Analysts say several factors are weighing on the market, including global risk aversion, foreign-exchange uncertainty, valuation gaps, election concerns and the new tax regime.

“Part of the reason the M&A market may have shrunk could be connected to global risk-off sentiment, which has pushed investors to become more selective worldwide,” said Abiodun Keripe, managing director of Afrinvest Consulting Limited.

Episodes of naira volatility and depreciation since 2023 have raised concerns among foreign investors about the ability to repatriate returns and dividends. Valuation differences between buyers and sellers have also made transactions harder to close.

“If they cannot find a sweet spot, transactions simply won't go through,” he said.

Tax adds to Nigeria's uncertainty

Nigeria's new Capital Gains Tax regime has added another layer of uncertainty, particularly for private equity investors whose returns depend on eventual exits. The Nigeria Tax Act, which took effect on January 1, increased the capital gains tax rate for companies from 10 percent to 30 percent.

The divergence between Kenya and Nigeria signals that global caution alone cannot explain the different performances. While investors across Africa have become more selective, Kenya has managed to attract several large strategic transactions, particularly in banking and financial services. Nigeria, by contrast, has seen companies increasingly turn to traditional capital raising, including rights issues, primary placements and public offers, rather than acquisitions.

For the naira and Nigerian businesses, the data suggests that investor interest is still present but highly selective. Big-ticket capital will flow to markets where regulatory clarity and exit routes are clearer, while Nigeria risks seeing more small deals that add volume without moving the needle on value.