Private Equity in Nigeria
Private Equity in Nigeria
An Overview of Nigerian Venture Capital and Private Equity
Private Equity in Nigeria
Page 2
CONTENT
EXECUTIVE SUMMARY 3
NIGERIA COUNTRY ANALYSIS 5
TABLES AND EXHIBITS 7
Private Equity in Nigeria
Page 3
Executive Summary1
Nigeria is facing an uncertain future as outbreaks of ethnic and religious violence continue to place strains on Africa’s most populated country. With the 2003 elections approaching, the continuing battle amongst incumbent politicians and between competing ethnic and regional groups is likely to intensify. Such an environment will test Nigeria’s fragile democracy, which has never witnessed a hand over from one civilian government to another. The Nigerian government is expected to continue with economic liberalization, at a slow pace. The government’s main challenges will be to curb spending, increase the pace of its privatization program, liberalize domestic fuel subsidies, improve the nation’s infrastructure and improve homeland security.
The challenges and constraints that private equity investors face in Nigeria can be grouped into three areas:
· Macro/country factors,
· Industry-specific factors,
· Company-specific factors.
These issues affect private equity investors in Nigeria differently depending on where the investor is located, the focus of their fund, and the preferred investment stage of the fund manager. It is important to have a strong understanding of the issues that private equity investors in Nigeria face in order to develop strategies for a successful Nigerian private equity industry in the future.
Venture Capital and Private Equity in Nigeria
Funds under management and commitments
Total funds under management in Nigeria are approximately $75 million (Exhibit IV).
This is due to the fact that private equity is a fairly new phenomenon in Nigeria. The first private equity fund in Nigeria, a $35 million fund sponsored by Capital Alliance Private
Equity
An Overview of Nigerian Venture Capital and Private Equity
Private Equity in Nigeria
Page 2
CONTENT
EXECUTIVE SUMMARY 3
NIGERIA COUNTRY ANALYSIS 5
TABLES AND EXHIBITS 7
Private Equity in Nigeria
Page 3
Executive Summary1
Nigeria is facing an uncertain future as outbreaks of ethnic and religious violence continue to place strains on Africa’s most populated country. With the 2003 elections approaching, the continuing battle amongst incumbent politicians and between competing ethnic and regional groups is likely to intensify. Such an environment will test Nigeria’s fragile democracy, which has never witnessed a hand over from one civilian government to another. The Nigerian government is expected to continue with economic liberalization, at a slow pace. The government’s main challenges will be to curb spending, increase the pace of its privatization program, liberalize domestic fuel subsidies, improve the nation’s infrastructure and improve homeland security.
The challenges and constraints that private equity investors face in Nigeria can be grouped into three areas:
· Macro/country factors,
· Industry-specific factors,
· Company-specific factors.
These issues affect private equity investors in Nigeria differently depending on where the investor is located, the focus of their fund, and the preferred investment stage of the fund manager. It is important to have a strong understanding of the issues that private equity investors in Nigeria face in order to develop strategies for a successful Nigerian private equity industry in the future.
Venture Capital and Private Equity in Nigeria
Funds under management and commitments
Total funds under management in Nigeria are approximately $75 million (Exhibit IV).
This is due to the fact that private equity is a fairly new phenomenon in Nigeria. The first private equity fund in Nigeria, a $35 million fund sponsored by Capital Alliance Private
Equity