Thursday, September 11, 2014 1.13 PM / Sriram Sekhar for TheAnalyst
Nigeria is amongst the fast growing countries on the African continent, indeed the biggest in Sub-Saharan Africa (SSA), and confidence in the Nigerian capital markets and the overall private sector performance has been growing year-on-year, with the Nigerian economy projected to be among the top 20 global economies by 2030 (with an estimated GDP of $1.6 trillion).
Over the past five years, Nigeria has shown a robust improvement in its political and economic outlook. Currently, the Nigerian economy is attracting a lot of investor attention, especially since it is now growing faster than South Africa.
Nigeria, is one of the most attractive destinations for foreign and domestic investors, as it gives an entry in Sub-Saharan Africa, and also given that many MNC's have set up or considering setting up a base in the country.
Nigeria's capital market has now evolved into an important avenue to support long term savings especially in the segment of new pension regulations, though not much capital is able to flow from the pension funds as would be expected.
The appetite towards investing in private equities (PE) for higher returns has started to increase in the country. According to the private equity growth capital council (PEGCC) of Nigeria, PE fund have delivered nearly 10% returns annually over the last ten (10) years.
Nigeria's National Pension Commission (PENCOM) regulations permits to invest 5% of the pension assets in PE funds, as a result the present Pension Fund Administrators (PFA) investments in PE funds accounts for 1% of the total industry asset.
Nigeria's PE regulation:
The Nigerian Stock Exchange (NSE) has brought about several rules and regulation to govern the PE funds in Nigeria, such as:
Types of Private equity:
Leveraged buyout, Growth equity, Venture Capital are a few types of funds which are in practice in the country.
Some deals happening in PE sector:
References for further reading: