Here are 10 African countries with most private equity investments in 2023

Mobel
By Mobel 10 Min Read

Here are 10 African countries with most private equity investments in 2023

Here are 10 African countries with most private equity investments in 2023 Botswana, Zimbabwe, Egypt, Angola and Zambia are among the countries with the most private equity investments in Africa last year, a new report by DealMakers Africa has revealed.

The report by the South Africa-based firm that tracks mergers and acquisitions (M&A) and corporate finance activity across the continent shows that Botswana had $1.88 billion followed by Zimbabwe with $1.75 billion. Egypt, Angola and Zambia had $1.39 billion, $1.23 billion and $772.8 million respectively.

The rest are Morocco ($752.9 million), Kenya ($600.3) million, Nigeria ($493.16 million), the Republic of Congo ($300 million) and Ghana ($291.1 million).

“Private equity investment, which for some years now has provided the momentum for M&A activity growth on the continent, was subdued in 2023. This is not surprising, given the higher interest rates and the fact that private equity firms rely on borrowing to part-fund deals,” the report said.

It said the analysis shows that as a percentage of the total deal value, private equity transactions continued to increase and have constituted 50 percent of the deal flow for the past few years.

“The value of deal activity recorded was $11.2 billion, a 36 percent decline on the previous year, and 28 percent down on the pre-COVID numbers of 2019. East Africa edged its way back to the top to claim the most activity per region, recording 144 deals, followed by West Africa (136 deals) and North Africa (107 deals),” the report said.

According to DealMakers Africa, out of the top 10 deals by value for 2023, eight involved targets in the energy or resources sectors, and these were predominantly located in Southern Africa.

Here are more details of the countries

Botswana

Botswana recorded $1.88 billion in private equity with a total of seven deals.

The report said, “In the first nature conservation loan of this magnitude in Africa, Standard Bank CIB acted as the sole lender and sustainability structuring agent for client, Wilderness, Africa’s largest conservation and hospitality company, to ensure the conservation of tracts of land more than 10 times the size of Mauritius.

“The deal allows our Botswana-based client to expand its operations within, and beyond, the eight African countries it already operates in.”

Zimbabwe

Zimbabwe recorded $1.75 billion in private equity with a total of seven deals.

“In terms of deal value, it was Southern Africa which stood out, and more specifically, Zimbabwe, with total deals valued at $5.8 billion, reflecting the size of several mining transactions announced during the year,” the report said.

Egypt

Egypt recorded $1.39 billion in private equity with 59 total deals.

“In 2022 and the first half of 2023, the most active countries in the region, in terms of M&A volume and value, were South Africa and Egypt, followed by Nigeria and Kenya,” the report said.

It added that Africa is well-positioned to serve as a sourcing hub for neighboring markets. Notably, the presence of good infrastructure, attractive locations, and favorable legal frameworks in Morocco, South Africa, and Egypt give those nations an edge over other African countries.

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Angola

Angola recorded $1.23 billion in private equity with eight total deals.

The report noted that when the African region’s total deal value fell to $6 billion — a sharp 62 percent decline compared to the first half of the year.
“The market surged to an all-time high in 2021 with deal values exceeding $44 billion signaling that dealmakers were playing catchup after the initial shock of the COVID-19 pandemic had passed.

“The merger of the Angolan oil and gas businesses of BP and Eni contributed to this dealmaking peak,” it stated.

Zambia

Zambia had $772.8 million in private equity with eight total deals.

“In seven countries across the continent, including Uganda, Zambia, Angola, Tanzania, the Gambia, Sierra Leone and Cameroon. This has increased our reach and enabled us to establish operations across 14 African countries (with plans to expand to 20, in line with our 2027 strategy),” Oluseyi Kumapayi, group chief financial officer of Access Bank said in the report.

“Moving further down south to Zambia, we have recently completed our acquisition of African Banking Corporation Zambia Limited, trading as Atlas Mara Zambia (Atlas Mara), after obtaining all requisite regulatory approvals,” he said.

Kumapayi added that the transaction will propel the combined entity into the top five banks by revenue in the Zambian market, with prospects to be in the top three by 2027.

“We also expect to create a larger platform to access the COMESA banking opportunity, supporting customers within the region through the Access Bank network.”

Morocco

Morocco recorded $ 752.85 million in private equity with 34 total deals.

“Supply chain considerations will promote M&A investments as companies’ sourcing strategies emphasise proximity and security, thanks to its abundant natural resources and young population, Africa is well positioned to serve as a sourcing hub for neighboring markets,” authors of the report said.

“Notably, the presence of good infrastructure, attractive locations, and favorable legal frameworks in Morocco, South Africa, and Egypt give those nations an edge over other African countries. Consolidation among logistics players to better serve African hinterlands, known as
“corridor integration”, will also lead to new deals,” they added.

Kenya

Kenya recorded $600.32 million in private equity with 95 total deals.

“The broad geographical outreach in the different economic zones presented a diverse set of regulatory frameworks,requiring national regulatory approvals to be sought from the communications and telco authorities in Kenya and Nigeria, as well as anti-trust regulatory approvals from several countries, including Morocco, Nigeria, Tanzania and COMESA,” the report said.

It added that East Africa Device Assembly Kenya (EADAK), a project to set up Kenya’s first electronics device assembly plant, is a joint venture between local telecommunications operators Safaricom, Jamii Telecommunications, Industrial Technology Training Company, and Chinese device dealer, TeleOne Technology.

Nigeria

Nigeria recorded $493.16 million in private equity with 82 total deals.

BusinessDay reported last week that Africa’s biggest economy was overtaken by Kenya which emerged as the country that got the highest private equity deals in Africa.

The report shows that Kenya and Nigeria recorded the most local deals with 95 ($600.3 million) and 82 ($493.1 million) respectively.

Republic of Congo

The Republic of Congo recorded $300 million in private equity with a total of two deals.
The country which is also called called Congo-Brazzaville, is a central African nation with rainforest reserves that are habitats for gorillas. It is one of the most urbanized countries in Africa, with nearly 70 percent of Congolese living in urban areas.

Ghana

Ghana recorded $291.1 million in private equity with 18 total deals.

Private equity activity in Ghana has continued to grow at a steady pace in recent years, as Ghana remains an attractive destination for foreign investment. Major players include emerging markets-focused funds such as Actis, Amethis, LeapFrog, and AfricInest; African-focused funds like AFIG and I&P; and local or West-African-focused funds such as Oasis, Injaro, and PCM Capital.

Ghana, officially the Republic of Ghana, is a country in West Africa. It abuts the Gulf of Guinea and the Atlantic Ocean to the south, sharing a border with Ivory Coast in the west, Burkina Faso in the north, and Togo in the east.

 

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