Private equity (PE) in Africa is demonstrating remarkable resilience and adaptability. The 2024 Deloitte Africa Private Equity Confidence Survey (PECS) report sheds light on this phenomenon, revealing how PE practitioners are navigating the complex African investment landscape.
Kenya is among 4 countries, including Nigeria, South Africa, and Tunisia, that continue to be top African investment hotspots. This statement encapsulates a key finding of the report, highlighting the enduring appeal of these markets despite broader economic uncertainties.
The report paints a picture of cautious optimism, with 62% of respondents in East Africa anticipating an improved economic climate over the next 12 months. This marks a significant shift from the previous year’s expectations of stagnation, suggesting a growing confidence in the region’s economic prospects.
Kevin Kimotho, Deloitte East Africa Private Equity Leader, attributes this positive outlook to timely policy reforms and regulatory changes across East Africa. “For PE firms, this convergence of favourable conditions across East Africa is not merely an opportunity for profitable exits, but a significant moment to shape the future of the region’s economic landscape,” Kimotho remarked.
The survey also reveals an evolving investment strategy among PE firms. While deal sizes are expected to remain moderate, there’s an anticipation of increased exit activity, primarily through secondary sales. This trend indicates a maturing market where PE firms are adeptly balancing risk and opportunity.
Kenya, in particular, emerges as a focal point for PE investment in the coming year. The country’s recent move to privatize 26 public institutions has caught the attention of investors, potentially opening up new avenues for PE involvement. However, Kimotho cautions that the success of these privatization efforts will hinge on the government’s ability to streamline processes and increase transparency.
The report’s findings underscore the PE sector’s ability to identify and capitalize on opportunities even in challenging economic environments. This adaptability is proving crucial in sustaining businesses and driving economic recovery across the continent.
