2020: Reviewing SSA's investment banking space

In 2020, the investment banking space in Sub-Saharan Africa experienced a significant decline in fees, with an estimated 523.7 million dollars earned, marking a 15 percent decrease from the previous year. This decline was the lowest annual total in six years, reflecting the challenges faced by the region amidst the global pandemic. Lucille Jones, an analyst for Deals Intelligence at Refinitiv, provided insights into the key themes and trends that shaped the investment banking landscape in Sub-Saharan Africa last year. One of the significant factors contributing to the decline in investment banking fees was the sharp fall in M&A advisory fees. M&A activity, which has traditionally been a lucrative area for fees, saw a drastic drop in 2020. Only six million dollars in M&A deals were recorded in the third quarter, the lowest quarterly total since 2003. The total value of M&A deals in the region during 2020 was just under 26 billion dollars, a 62 percent decline from 2019. This decline was notable even compared to previous years, with activity at its lowest level since 2012. The impact of the COVID-19 pandemic was evident in the sharp decline in dealmaking from March, as companies adopted a wait-and-see approach amidst the uncertainty. However, there were signs of recovery in the latter part of the year, with an increase in deal announcements and values. Sectors that saw heightened activity included healthcare, technology, and fintech. The pharmaceutical industry witnessed a significant deal in September, with US firm Mylan acquiring the thrombosis business from South African company Aspen Pharmacare for nearly 800 million dollars. The technology sector also saw notable investments, with acquisitions in programming firms, fiber optic cables, and fintech companies. Additionally, private equity investments in internet providers indicated ongoing interest in the tech sector. Looking ahead to 2021, it is anticipated that certain industries will continue to attract investment, driven by the shifts brought about by the pandemic. Healthcare, technology, and fintech are likely to remain active areas for dealmaking, as companies adapt to the evolving landscape. Traditional sectors such as energy and materials, particularly natural resources like copper and cobalt, are also expected to see increased investment. The demand for these resources, driven by factors such as the growth of electric vehicles, presents opportunities for investment in Sub-Saharan Africa. Despite the challenges faced in 2020, the resilience and adaptability of the investment banking space in Sub-Saharan Africa suggest a potential rebound in the year ahead. As the region navigates the ongoing impact of the pandemic and explores new opportunities for growth, the investment landscape continues to evolve, laying the foundation for a dynamic year ahead.