Nigeria leans on debt as Africa M&A hits 2005 low

Nigeria remained one of Sub-Saharan Africa’s largest investment banking markets in 2025, accounting for 19.4 percent of total regional fees, even as corporate dealmaking across the continent fell to its lowest level in two decades.

Data from LSEG’s Sub-Saharan Africa Investment Banking Review: Full Year 2025 show that regional investment banking fees rose 13.1 percent to US$503.9 million last year. The increase, however, was driven largely by debt issuance rather than mergers and acquisitions.

“The number of deals announced in the region fell 13.4% to the lowest level since 2005,” the report stated. Although total announced M&A value edged up 0.8 percent to US$37.2 billion, overall transaction activity weakened markedly.

Domestic markets recorded the sharpest pullback. Deals targeting Sub-Saharan African companies declined 24.3 percent to US$18.6 billion, while domestic M&A activity fell 69.3 percent by value. Advisory fees from completed M&A transactions dropped 31.3 percent to US$122.2 million, the lowest annual total in four years.

By contrast, debt markets expanded strongly. “Sub-Saharan African bond issuance totalled US$32.7 billion in 2025, 54% more than the value recorded last year and a four-year high,” LSEG said. Government & Agencies issuance accounted for 68 percent of total proceeds raised during the year, underscoring the dominance of sovereign borrowers.

Nigeria ranked among the top three issuer nations, accounting for 10.7 percent of total bond proceeds. The country raised US$2.35 billion in international debt markets during the year, contributing to its strong share of regional fee generation.

The divergence highlights a shift in the region’s capital markets structure. While Nigeria maintained a significant position in investment banking revenues, growth in 2025 was underpinned by sovereign financing, as mergers and acquisitions activity across Sub-Saharan Africa retreated to levels last seen in 2005.