The energy, mining and utilities (EMU) sector reflected the highest aggregate deal value in sub-Saharan Africa (SSA) in 2022, according to a report by KPMG.
The professional services company said this sector raked in $7.8 billion out of deals worth $19.2bn in the SSA region so far this year.
According to the report titled "Doing Deals in Sub-Saharan Africa," the EMU sector also recorded the region's highest deal numbers at 64 deals in 2022, matching the total for 2021.
In total, there were 297 deals across all sectors.
The report noted that the region is home to a wealth of natural resources, a major attraction for investors who can take a long-term view.
It stressed that availability of physical assets and natural resources was the most frequently cited driver for respondents' recent acquisitions or investments.
The report noted that mergers and acquisitions (M&A) activity in SSA made an impressive comeback in 2022 following the pandemic and, unlike the rest of the world, posted record transaction volumes.
The total amount of deals represents a 21% increase from 2021 and is almost double the activity seen in 2020.
“While total deal value fell sharply year-on-year in 2022, it remained within a range of annual aggregate values seen in the previous decade, reaching $19.2bn, a notable recovery from $8.6bn in 2020,” the report says.
While expressing optimism for future deals within the region, the report recorded South Africa and Nigeria as the top investment destinations for investors.
It said most international investors expressed willingness to return to the African market, with 68% indicating that their experience of deal-making in the region was positive.
Commenting on the report, partner and head of Transaction Services at KPMG West Africa, Ijeoma Emezie-Ezigbo, said that sub-Saharan Africa continues to present a significant opportunity for investors.
She stressed that the region's demographics and significant headroom for economic development are among the factors which will continue to spur growth over the coming years.
Emezie-Ezigbo advised investors who take medium-to-long-term positions in the region that long-term returns are looking good.
