State of private equity in Africa: great potential, too little deals

The staggering disparity between the continent’s private equity deals, a report by the Boston Consulting Group (BCG), titled Why Africa Remains Ripe for Private Equity, shows that Africa remains one of the world’s growth opportunities for private equity investors to generate the high returns that investors expect.

Economic development in Africa has traditionally been at the province of resource-based economy, foreign-aid agencies, local and international, and publicly funded multilateral finance institutions and recently, portfolio investment to boost cash flow in the economy.

But over the last decade, the narrative changed, there was huge direct investment in Africa and was growing and full of potential, until last year, it all changed, due to a weak economy and falling currencies.

Experts believe the growing fund market in Africa is too strong to remain stagnant. The desire by fund managers to diversify their portfolios and to look for exciting opportunities outside the developed and matured market of Western Europe and North America, will drive Africa revival.