Kenya Overtakes Nigeria as Africa’s Biggest Market for Deals
KENYA · MARKETS
Key Facts
—A 670.5% jump: Kenyan deal value rose 670.5% year on year to US$1.44bn in the first half of 2026, according to DealMakers Africa. That lifted the country five places from sixth in the same period last year.
—Nigeria’s near-decade low: Nigerian M&A value fell 88.9% to US$105.8m, its weakest in nearly ten years. Nigeria had ranked first by value in the first halves of 2021, 2022, 2024 and 2025, and dropped to ninth this year.
—Volume is not value: Kenya recorded 25 deals against Nigeria’s 39, yet attracted almost eight times the capital. Nigeria still had the highest deal count on the continent.
—The continent cooled: Excluding South Africa, African M&A value fell 10% year on year to US$5.58bn, and volumes fell 13% to 166 deals. Kenya, Nigeria, Egypt and Morocco were the biggest drivers of activity.
—Banking did the heavy lifting: Nedbank’s proposed 66% stake in NCBA Group, valued by DealMakers at about US$855m, was the second-largest deal announced on the continent in the first quarter. KCB Group also moved for a majority stake in the fintech Riverbank Solutions.
—A tax question in Lagos: Nigeria’s Tax Act, effective 1 January, raised the capital gains tax rate for companies from 10% to 30%. Analysts quoted by BusinessDay caution that it is one factor among several rather than the main cause.
—Where the big money went: Upstream energy and mining kept drawing what DealMakers called aggressive and opportunistic buyers, with major transactions in Angola, Ghana and Equatorial Guinea worth a combined US$1.21bn.
The Kenya M&A market has overtaken Nigeria as Africa’s largest by value, after Kenyan deal value rose 670.5% year on year to US$1.44bn in the first half of 2026. Nigeria, which still recorded the most transactions on the continent, saw its deal value collapse 88.9% to US$105.8m.
How the Kenya M&A market pulled ahead
The figures come from DealMakers Africa, the South African firm that tracks merger and corporate-finance activity across the continent, and were reported by BusinessDay on 31 August. Kenya climbed five places from sixth position a year earlier.
The rise was built on a small number of large transactions rather than a broad wave. Banking, financial technology and other strategic sectors carried most of the value.
Kenya recorded 25 deals in the period. Nigeria recorded 39 and attracted roughly an eighth of the capital.
That contrast is the story in one line. Investors are still transacting in West Africa, but they are writing much smaller cheques there.
Bank consolidation is the engine
Kenyan banking has been reshaped by recapitalisation requirements from the Central Bank of Kenya, which have left smaller lenders with a blunt choice. Thomas Louis Advocates, a Nairobi firm specialising in fintech and corporate law, framed it as growing through acquisition or being acquired.
The headline transaction was Nedbank’s proposed acquisition of a 66% stake in NCBA Group, which DealMakers valued at about US$855m. It ranked as the second-largest deal announced anywhere on the continent in the first quarter.
KCB Group’s move for a majority stake in Riverbank Solutions pointed in the same direction, buying digital capability rather than building it. Foreign and regional capital has been circling East Africa for two years.
Nigeria’s problem is not indifference
Nigeria’s deal count actually rose, from 31 a year earlier to 39. What fell away was the large transaction.
Analysts quoted by BusinessDay pointed to several overlapping pressures. Abiodun Keripe of Afrinvest Consulting cited global risk aversion, trade tensions, uncertainty over interest rates and still-elevated inflation pushing investors to be more selective everywhere.
Currency history adds a specifically Nigerian layer. Episodes of naira volatility since 2023 have made foreign buyers wary about repatriating returns and dividends.
Valuation gaps have also slowed closings. When buyers and sellers cannot meet, transactions simply do not complete.
The tax argument, handled carefully
Nigeria’s new Tax Act took effect on 1 January and raised the capital gains tax rate for companies from 10% to 30%. For private equity, whose returns depend on exits, that changes the arithmetic.
But the analysts BusinessDay spoke to resisted the simple explanation. Ayokunle Olubunmi of Agusto & Co said private equity is only a portion of Nigerian M&A and its decline was not large enough to explain the overall drop.
His more measured point is about behaviour rather than volume. Sellers may seek higher valuations to offset the tax, and buyers may refuse to pay them.
A two-speed continent
Regionally, West Africa remained the busiest with 55 deals, followed by East Africa with 39 and North Africa with 34. By country, Nigeria led on 39, then Kenya on 25, Egypt on 18 and Morocco on 15.
The largest cheques stayed concentrated in energy, mining, banking and telecommunications. Angola, Ghana and Equatorial Guinea together accounted for US$1.21bn of upstream energy and mining transactions.
Private equity supplied 76 transactions in the half, though DealMakers noted activity has fallen from its 2023 level as exits have become harder. Marylou Greig, the firm’s editor, said geopolitical developments had heightened uncertainty and made buyers more cautious.
What this means for investors watching Africa
The useful reading is not that Kenya has become a better market than Nigeria in some permanent sense. It is that capital is concentrating where the regulatory direction is legible.
Kenya’s bank recapitalisation rules created a forced, dated reason to transact. Nigeria has no equivalent catalyst at present, and its currency and tax questions are still being answered.
Nigeria’s route back is therefore narrow but clear. It needs large deals to return, which requires confidence about exits rather than a higher number of small transactions.
Frequently Asked Questions
How much did Kenyan M&A grow in the first half of 2026?
Kenyan deal value rose 670.5% year on year to US$1.44bn, according to DealMakers Africa. That moved Kenya from sixth place to first on the continent by value.
Why did Nigeria’s M&A value fall so sharply?
Nigerian deal value fell 88.9% to US$105.8m, its lowest in nearly a decade. Analysts cited global risk aversion, naira volatility, valuation gaps and a new capital gains tax regime.
Which was the biggest Kenyan deal?
Nedbank’s proposed acquisition of a 66% stake in NCBA Group, valued by DealMakers at about US$855m. It was the second-largest deal announced on the continent in the first quarter.
How did African M&A perform overall?
Excluding South Africa, value fell 10% year on year to US$5.58bn and volumes fell 13% to 166 deals. Kenya, Nigeria, Egypt and Morocco drove most of the activity.
Did Nigeria still lead on deal numbers?
Yes. Nigeria recorded 39 transactions, the highest count in Africa, up from 31 a year earlier, while attracting about an eighth of Kenya’s deal value.
Connected Coverage
More from our Eastern Africa desk, and the wider Africa: The New Scramble. We have followed the same banking wave in South African banks scrambling for a foothold in Kenya, and looked at how African corporates now grow by acquisition rather than organically in a separate report.
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