Private equity in Africa steps up a gear in 2016: African Private Equity and Venture Capital Association (AVCA)

Private equity investment in Africa continues to go from strength to strength, evidenced by a new report from the African Private Equity and Venture Capital Association (AVCA). AVCA’s 2016 Annual African Private Equity (PE) Data Tracker shows a marked increase in the total deal value during 2016.

Overall, there were 145 PE deals reported in Africa over the course of the year, amounting to US$3.8bn – versus US$2.5bn in 2015 – highlighting the robust nature of Africa’s investment landscape amidst global headwinds and worldwide political shifts.

In terms of deal size, several large transactions in the energy and utilities sectors in 2016 contributed to the notable rise in total deal value compared with the previous year. The total value of deals above US$250mn was also significantly larger than in 2015.

African PE funds registered a final close total of US$2.3bn in 2016, which although lower than the previous year, supports an upward trend over the past 5 years.

West Africa continues to be the focus for PE investments by region, holding a 27% share of both number of deals and deal value between 2011 and 2016.

The 2017 outlook is positive, with strong indications of sustained confidence in the African PE industry. With political stability returning to North Africa, it is expected that there will be a growing appetite for investment in the region, along with under-served markets such as Central Africa.

Commenting on the report, Cyril Odu, Chief Executive Officer at African Capital Alliance, noted: “As the effects of rapid urbanization, a resilient and adapting middle class and accelerating consumption patterns begin to take shape, increasing investor interest will continue to boost deal flow and intensify capital injections. As the 2016 Annual PE Data Tracker shows, private investment in Africa is developing at an exciting rate.”

Enitan Obasanjo-Adeleye, Director and Head of Research at AVCA, added: “Africa’s PE potential is coming to fruition as illustrated here through another year of strong results. This is no flash in the pan; we now have seen strong and sustained PE investment in Africa over the past 10 years and AVCA will continue to play its role as a major enabler and champion for PE investment in Africa as the region becomes more widely recognized as the world’s most exciting and attractive frontier investment destination”.

The report has been published as AVCA prepares for its 14th annual global conference, which returns to francophone Africa for the first time in ten years as part of AVCA’s mission to showcase investment opportunities across the continent. The 14th Annual AVCA Conference will take place in Abidjan, Côte d’Ivoire on Tuesday 4th and Wednesday 5th April 2017.

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