UK investment in Africa surges as firms target Nigeria and other nations for growth, driven by reforms, resources, and AfCFTA opportunities amid US pullback

A new wave of UK investment in Africa is unfolding, with Nigeria and other mineral-rich countries fast becoming prime destinations for British businesses seeking growth and diversification beyond traditional markets.

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According to new research by UK-based Strategy Management Partners, over 50% of large British companies are already operating across African markets, with many planning to scale further.

An additional 28% are actively exploring opportunities on the continent but remain cautious due to regulatory complexity and political risk.

Africa’s growing allure stems from three key factors: vast mineral wealth, a youthful population, and bold structural reforms.

The continent holds:

• 30% of global mineral reserves
• 12% of the world’s oil supply
• 65% of arable land, and
• Alabour force projected to account for 25% of the global total by 2035

Seven sectors are emerging as investment hotspots:

Technology, Oil & Gas, Renewable Energy, Agriculture, Manufacturing, Infrastructure, and Strategic Minerals like lithium and cobalt—vital for the global energy transition.

“Africa is no longer just a resource hub,” the report states. “It is becoming a centre of innovation, consumption, and labour.”

Strategy Management Partners surveyed 250 senior UK executives, including CEOs and Heads of Strategy, from firms with annual revenues exceeding £20m.

The findings reveal a major shift in perception: Africa is being redefined from a frontier market into a core strategic region.

“UK businesses are paying attention,” said Muibat Ijaiya, a Partner at the firm. “They see the demographic dividend, infrastructure reforms, and digital revolution as key enablers of long-term return.”

But she stressed that public-private alignment is essential. “Real progress depends on strong cooperation between governments and investors, especially around the African Continental Free Trade Area (AfCFTA).”

This growing UK focus comes amid a sharp downturn in US-Nigeria trade relations. Between January and May 2025, US imports from Nigeria fell by $527 million, a 20% year-on-year drop.

The decline followed US President Donald Trump’s April 2025 executive order imposing a 10% blanket tariff, and a 14% tariff specifically targeting Nigeria due to its trade surplus with the US.

Additional levies may apply to countries aligning with BRICS, where Nigeria is a potential member.

While the US scales back, UK trade missions are filling the gap.

During a recent visit to Nigeria, Mayor of London Sadiq Khan led a delegation of 27 British companies focused on fintech, tech, sustainability, and education.

“Africa has the world’s fastest-growing population and major economic potential,” Khan said. “I’m here to champion deeper UK-Africa ties.”

To accelerate UK investment in Africa, Public-Private Partnerships (PPPs) are being championed as a strategic solution.

Speaking to our correspondent, Babatunji Adegoke, Treasurer of the Nigerian Society of Engineers (Victoria Island), emphasised that PPPs offer a flexible, structured model that can attract Foreign Direct Investment (FDI), particularly in high-potential areas like lithium.

“PPP is no longer optional—it’s a strategic necessity,” he said. “It provides clarity, reduces risk, and channels private capital toward public goals.”

Adegoke highlighted the importance of developing infrastructure—not just for mining, but also for processing, transport, and logistics—making structured PPPs the best route for financing these complex ventures.

He also noted that local professionals must play a bigger role in structuring and managing transactions. “Local insight improves sustainability and ensures that deals serve national interests.”

Despite growing optimism, investors continue to cite several key concerns:

• Regulatory complexity
• Political instability
• Currency volatility
• Cross-border transaction barriers

Yet, the report downplayed some commonly assumed obstacles, like challenges in opening local bank accounts or accessing working capital, suggesting that perceived risks may be higher than real ones in some areas.

Still, the continent’s economic future is not without hurdles. Trade reform, governance, and legal certainty remain crucial to unlocking Africa’s full investment potential.

Governments across Africa are shifting from resource extraction to value-added development. Local beneficiation, processing plants, and regional manufacturing hubs are beginning to take root.

This trend is bolstered by:

• AfCFTA, which now has 23 countries implementing preferential tariffs
• China’s tariff eliminations on imports from 53 African nations
• Renewed industrial policies from South Africa to Nigeria

Strategic minerals like cobalt, manganese, and graphite are placing Africa at the heart of the global clean energy supply chain.

With 70% of Africans under 30, a massive consumer class is emerging, fuelling demand for housing, digital services, transport, and healthcare.

For British businesses with vision and long-term commitment, the opportunities are immense.

As the Strategy Management Partners report concludes:

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“Africa’s moment is now. The businesses that move with purpose, partner locally, and stay for the long haul will not just invest—they will become part of Africa’s transformation story.”