Profits and pitfalls on the private equity path into Africa: Hurley Doddy, Founding Partner, Emerging Capital Partners

Africa is home to some of the world’s fastest growing economies and an increasing number of investors believe private equity could prove an effective way in. Yet the asset class remains niche and the risks very real.

Private equity has been drawing investors’ interest as an effective vehicle to access the African growth story, fueled by a phenomenal rise of the middle class and expansion of private consumption. While stock markets across the African continent are, with a few exceptions, still in an early stage of development, there are a range of factors fueling investor interest in private equity.

Favorable demographics, more wide­spread adoption of democracy, with Nigeria’s latest elections a significant example, liberal economic policies, better corporate governance and improving education levels are driving high levels of economic expansion. Five of the world’s 10 fastest-growing countries are African, including Ethiopia, Mozambique, Tanzania, Ghana and Nigeria, with GDP growth rates between 7 and 8 per cent, according to the Economist.

Read more: Hurley Doddy featured in Professional Wealth Management on investment in Africa | ECP Investments