According to a recent report by DealMakers Africa, Ghana attracted private equity investments totaling $291.1 million in 2023, positioning it among the top countries in Africa for such investments. Botswana led the rankings with $1.88 billion, followed closely by Zimbabwe with $1.75 billion. Egypt, Angola, and Zambia also featured prominently, with investments totaling $1.39 billion, $1.23 billion, and $772.8 million, respectively.
The report highlights the significance of private equity investments across the continent, indicating that they have been a key driver of mergers and acquisitions (M&A) and corporate finance activities. However, it notes a subdued trend in private equity investments for 2023, attributed in part to higher interest rates and the reliance of private equity firms on borrowing to fund deals.
Despite the overall decline in deal value, private equity transactions have continued to represent a substantial portion of the total deal flow, constituting approximately 50% of deal activity in recent years. The total value of deal activity in 2023 was reported at $11.2 billion, reflecting a 36% decrease compared to the previous year and a 28% decline from pre-COVID levels in 2019.
Regionally, East Africa emerged as the leader in deal activity, recording 144 deals, followed by West Africa with 136 deals and North Africa with 107 deals. Notably, the report highlights that eight out of the top 10 deals by value in 2023 were in the energy or resources sectors, predominantly located in Southern Africa.
Below 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.
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 have invested in Ghana.
Ghana, officially the Republic of Ghana, 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.
