Private Equity Firms in Nigeria Face Worst Year for Investment Exit.

Private equity firms in Nigeria have not been spared from the global lull in the sale of portfolio companies this year.

The firms are facing the worst year since 2012 for investment exits due to a combination of high interest rates and geopolitical tensions which has marred private capital inflows and upended valuations.

Only 17 companies were sold by private equity firms across Africa in the first six months of 2023, the lowest in nine years, according to data from the African Private Equity and Venture Capital Association (AVCA).

The slowdown is in contrast to the record breaking 2022, which saw 29 exits at this stage in the same period and a total of 82 exits by the end of the year, the most since at least 2007.

Also The steep decline in exit activity has been worsened by the rapidly weakening naira value against the dollar, which is so volatile it upends valuations within days and has created uncertainty for investors.

Nigeria allowed the naira to weaken against the dollar in June, paving the way for a 40 percent devaluation in one fell swoop.