AVCA: There is growing appetite for private equity investment in Africa

A recent survey on private equity in Africa has shed light on the growing appetite for investment in the region despite the challenges posed by the COVID-19 pandemic. The survey conducted by the African Private Equity and Venture Capital Association highlighted that a significant number of Limited Partners (LPs) across various types, sizes, and locations remain optimistic about investing in Africa. The CEO of the organization, Abi Mustapha-Maduakor, discussed the impact of the pandemic on deal-making and the driving factors behind the increasing interest in private equity in Africa. Despite the macro instability that characterized much of 2020, LPs are looking at West Africa and North Africa as attractive regions for private equity investment over the next three years. The consumer story, the young population, and the growth potential in these regions continue to be key drivers for investor interest. West Africa, particularly Nigeria, has seen a surge in investment activity, especially in sectors like healthcare and consumer goods. Additionally, North Africa, with Egypt emerging as a hub for venture capital investments, has piqued the interest of LPs. The ecosystem in Egypt is thriving, with significant investments flowing into various sectors, including technology. The COVID-19 pandemic has brought about a digital transformation across the continent, leading to an increase in technology-enabled innovations in finance, health, education, and other sectors. This shift has created opportunities for investors to support businesses that are leveraging technology to navigate the challenges posed by the pandemic. While some investors may benefit from lower valuations in the market, the primary focus remains on driving growth and supporting businesses that are in need of capital. Fund managers operating in Africa are focused on protecting their portfolio companies and navigating operational challenges while exploring new opportunities for investment. The resilience of the private equity sector in Africa in the face of adversity demonstrates the confidence and commitment of investors to the region's long-term growth and development.