Citigroup Inc. said deals in Nigeria, Africa’s biggest oil producer, have plummeted because investors are too scared to spend money when it’s expected that the naira will have to be devalued.
“I see this as a year of pause,” Miguel Melo Azevedo, Citigroup’s head of investment banking for Africa, said in an interview in Cape Town. “You will look very stupid if you buy something in Nigeria and tomorrow it gets devalued. There’s an embarrassment factor”.
This year there have been 12 deals valued at $1.45 billion compared with a year ago when there were 19 deals worth $5.62 billion, according to data compiled by Bloomberg.
Citigroup however said Nigerian deal making could pick up in 2017 as low valuations attract buyers.