Private Equity, Venture Capital Drive Growth Opportunities in Africa

Private equity

30 November 2020//- A new Covid-19 Response Report (CRR) produced by Oxford Business Group (OBG), in partnership with the African Private Equity and Venture Capital Association (AVCA), highlighted the investment opportunities that have emerged in essential sectors in the economies of Africa.

It also showcased how Africa’s private equity (PE) and venture capital (VC) industry have risen to the challenge of supporting African economies and companies through the pandemic in order to assure further resilience, recovery and growth.

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Titled “Private Equity and Venture Capital in Africa”, the CRR provides in-depth analysis of the industry’s response to the pandemic in an easy-to-navigate and accessible format, containing key data and infographics relating to trends and developments in PE and VC.

The report traces the evolution of PE in the region, from its early days in the hands of development finance institutions to the arrival of global institutional investors and the development of Africa-focused funds.

There is detailed coverage of the way in which activity has expanded from a focus on consumer industries to include other sectors ranging from renewables, infrastructure and real estate to information technology and industrials.

Geographical shifts are also explored, with analysis provided of PE expansion and trends across Africa by region. The report details the continued attractiveness of established PE markets within Africa such as South Africa, Nigeria, Kenya, Egypt, Morocco and Ghana, while exploring opportunities for PE investment post-Covid-19 in other regions.

In addition, the CRR tracks the development and expansion of the VC ecosystem and the maturation of the entrepreneurial space in sub-Saharan Africa.

The report explores recent opportunities for VC investment, highlighting the most attractive verticals and sectors including financials, ICT and renewable energy.

The impact of Covid-19 on African PE and VC is also examined. The report documents the consequences of the initial shocks following the arrival of the virus. It also considers both the resilience demonstrated by the industry and what it meant for some regions and sectors to be less affected by the pandemic than others.

The CRR contains several viewpoints by high-profile industry representatives and case studies on topical issues related to PE and VC.

Additionally, it includes critical findings from key AVCA publications, including the African Private Equity Industry Survey, published in March, the 2019 Annual African Private Equity Data Tracker, released in March, the AVCA Venture Capital in Africa report, published in June, and the AVCA 2020 H1 African Private Equity Data Tracker.

 Dara Owoyemi, AVCA Interim CEO, said: “At a time of global uncertainty and concerns over public health and safety, institutional investors and fund managers operating in Africa have provided support and additional liquidity to investee companies to enable ongoing operations and trade, as a result – protecting jobs and livelihoods. For some, this is a time of difficulty. For others, this is a time of vast opportunity, but for all, it is a time of change and transformation.”

Karine Loehman, OBG’s Managing Director for Africa, said that a combination of PE expansion and diversification efforts across Africa were expected to further boost investor interest in the region.

“The initial signs emanating from this pandemic are that Africa remains as attractive an investment destination,” she said. “Given that the pandemic has widened funding gaps for several governments, we may well also see additional investor-friendly measures introduced across a number of markets, including initiatives related to the regulations governing PE.”

The CRR forms part of a series of tailored reports which the global research and advisory company is currently producing with its partners, alongside other highly relevant, go-to research tools, including a range of country-specific Covid-19 Economic Impact Assessment articles and interviews.

To access AVCA’s research reports covering fundraising, investments, exits and more click here.

African Eye Report