Africa’s 2024 Private Capital Boom, Cools in Early 2025 – Will Investment Pick Up?
Africa’s private capital markets posted remarkable growth in 2024, though momentum has slowed into early 2025 as investor focus shifts to...
Quick overview
- Africa's private capital markets experienced significant growth in 2024, with total deal values exceeding $10 billion, a 50% increase from 2023.
- Secondary private capital transactions reached record levels, surging to $160 billion in 2024, reflecting increased liquidity in key markets.
- Early 2025 saw a decline in deal activity, with total announced deal value dropping to $1.6 billion as investors shifted focus to mid-sized deals.
- Despite the slowdown, equity financing gained prominence, making up 79% of Q1 2025 deals, indicating a trend towards long-term investments.
Africa’s private capital markets posted remarkable growth in 2024, though momentum has slowed into early 2025 as investor focus shifts to medium-sized deals.
Robust Growth in 2024 Sets the Stage
African private capital markets recorded substantial growth in 2024 as countries across the continent advanced toward developing economy status. According to analysis from Stears, total announced private capital deal values surpassed $10 billion in 2024, marking a striking 50% increase from the $6.7 billion recorded in 2023. This growth occurred despite a reduced disclosure rate of just 46% compared to 71% the prior year—an indication that a few mega deals had an outsized impact on overall numbers.
South Africa, Kenya, and Nigeria, Egypt and Ghana led the continent in private capital activity, each capturing roughly a quarter of all transactions with increases. These five countries represented the bulk of investment interest across the region. The strong performance in 2024 capped off a year of rapid capital inflows and growing investor confidence in African markets.
Secondary Transactions Reach Record Levels
Beyond primary capital flows, Africa’s secondary private capital transactions also hit historic highs. Total secondary deal volume surged to $160 billion in 2024, a significant increase from $114 billion in 2023 and $103 billion in 2022. This upswing reflected growing liquidity and maturing capital ecosystems in key markets such as Nigeria and South Africa, allowing earlier investors to exit positions or trade equity stakes.
Early 2025 Sees a Pullback in Deal Activity
Despite the explosive growth in 2024, 2025 opened on a quieter note. In the first quarter, total announced deal value fell to just $1.6 billion, sharply down from $4.7 billion in the final quarter of 2024. Analysts attribute this slowdown not to a loss in investor confidence, but rather to a compositional shift in deal preferences—away from mega-deals exceeding $75 million toward a stronger focus on mid-sized investments between $25 million and $75 million.
South Africa continued to lead in Q1 2025, accounting for 17% of all single-country transactions, followed by Kenya and Nigeria. Notably, equity financing gained even more prominence, comprising 79% of all Q1 deals—up from 73% in Q4 2024. This suggests a deeper commitment to long-term investments and reduced dependence on debt-heavy deal structures.
Regional Breakdown: Private Capital Activity in Africa (2024 – Q1 2025)
| Country | Share of 2024 Total Transactions | Q1 2025 Share | Notable Trends |
|---|---|---|---|
| South Africa | 25% | 17% | Leading both years; strength in secondary deals |
| Kenya | 25% | ~15% (est.) | Solid contributor; rising tech investments |
| Nigeria | 24% | ~15% (est.) | High liquidity; strong secondary market |
| Egypt | 14% | Lower in Q1 | Slight dip; previously driven by mega deals |
| Ghana | 13% | Minor activity | Fewer large deals in Q1 |
| Metric | 2023 | 2024 | Q1 2025 | Notes |
|---|---|---|---|---|
| Total Deal Value | $6.7 billion | $10+ billion | $1.6 billion | 2024 saw 50% YoY growth; sharp Q1 2025 dip |
| Disclosure Rate | 71% | 46% | ~46% | Lower visibility, higher concentration deals |
| Secondary Transactions | $114 billion | $160 billion | — | Strong indicator of maturing capital markets |
| Mega Deal Share | High | Dominant | Lower | Q1 2025 shift toward mid-sized investments |
| Equity Share of Financing | ~73% (Q4) | — | 79% (Q1) | Equity-driven approach gaining traction |
Conclusion: 2025 Likely to Pick Up After the Slow Start
Africa’s private capital market continues to evolve, showing both strong resilience and strategic recalibration. The momentum from 2024, driven by large-scale investments and increased regional activity, has set a high baseline. However, the shift toward smaller, equity-focused deals in 2025 signals a maturing investment environment—one that is moving toward sustainable, long-term value creation rather than relying on blockbuster transactions alone.
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