United Kingdom’s development finance firm, CDC is set to spend over $1Bn on Nigeria in investments as part of its post-Brexit plans.
If all goes according to plan, the U.K will leave the rest of the European Union in March, 2019.
CDC’s proposed investment in Nigeria is a large chunk of the $4.5bn investment that has been earmarked for some of Africa’s biggest economies.
CDC, which has investments ranging from listed Nigerian banks to an Ethiopian wine-maker and a safari lodge in Zimbabwe, aims to put as much as $4.5 billion into the continent in the next four years, which would almost triple its existing African portfolio of roughly $2.6 billion.
“A reasonable figure for Nigeria, given the size of its economy, would be about $1.2 billion,” Nicholas O’Donohoe, CDC’s chief executive officer, said in an interview in Lagos, Nigeria’s commercial capital.
The firm also hopes to open an office in Nairobi, and Lagos, in addition to its Johannesburg office. The Nigerian office will open next year, and start with 10 officials.
CDC has been active in Nigeria, where it has $400 million of investments, for 70 years. It has injected money into companies directly as equity or debt, or through private-equity funds.
U.K. Prime Minister Theresa May visited South Africa, Nigeria and Kenya earlier this year, saying she wanted the country to become the G7’s biggest investor on the continent by 2022.
O’Donohoe said that the bank may increase its investments in some Nigeria’s major banks.
It currently has stakes in Nigerian lenders including Diamond Bank Plc, Guaranty Trust Bank Plc and Zenith Bank Plc.
The firm is also working hand-in-hand with the administrators of Kenya’s ARM Cement Ltd, part-owned by CDC and which has been exploring a sale since last year to help manage its debts.
The bank is looking towards Nigeria’s richest man, Aliko Dangote who is mulling buying over the company.
“We’re in the risk-taking business and that one did not work out well,” said O’Donohoe. “But it’s an attractive
CDC also hopes to invest more in East Africa as it weighs some Kenyan, and Ethiopian companies.
”CDC will still look to invest more in Kenya and other East African countries, including Ethiopia, Tenbite Ermias, head of Africa”, said in the same interview
“Ethiopia could be a big opportunity,” he said. “It depends on how the economy and politics progress.”