Kenya Overtakes Nigeria as Africa’s Largest M&A Market by Value

Kenya’s merger and acquisition market overtook Nigeria’s to become the largest in Africa by value in the first half of 2026, according to data from DealMakers Africa reported by BusinessDay on 31 August. Kenyan deal value rose 670.5% year on year to US$1.44 billion, while Nigeria recorded the highest number of transactions on the continent but saw its total deal value collapse 88.9% to US$105.8 million.

Bank Consolidation Drives Kenya’s Surge

Three large transactions accounted for much of Kenya’s first-half total, according to the report: Nedbank’s roughly US$855 million acquisition of NCBA, Absa’s approximately US$239 million purchase of additional shares in Absa Bank Kenya, and a US$215 million investment in electric-vehicle maker Spiro. Banking consolidation was the single largest driver of the increase, reflecting a wider trend of regional lenders expanding their footprint across East Africa through acquisitions rather than organic branch growth.

Why Nigeria’s Deal Value Fell

Analysts cited by the report pointed to global risk aversion, naira volatility, valuation gaps between buyers and sellers, and a new capital gains tax regime as factors behind the sharp decline in Nigerian deal value, even as the country continued to record the highest number of individual transactions on the continent. The contrast between deal count and deal value suggests Nigerian dealmaking has shifted toward smaller transactions, with large-scale investors adopting a more cautious, wait-and-see approach until currency and tax conditions stabilise.

Why It Matters

The shift highlights how currency stability and a functioning banking sector can outweigh sheer market size in attracting dealmakers, with implications for how international investors allocate capital across Africa’s largest economies. For Kenya, the surge in deal activity offers a signal of renewed investor confidence in its financial sector, while Nigeria’s decline underscores the deterrent effect of currency and tax uncertainty on foreign investment, a lesson other African markets competing for the same pool of capital are likely to note closely.