Africa looks set for a bright future on the private equity front with activity on the rise, according to a new report which predicts that around a billion dollars could be invested in the next five years.
Private equity activity in Africa will inject billions of US dollars of sustainable investment over the next five years with deals growing from a low base equivalent to 0.18 per cent of Africa’s GDP in 2016, the report says. According to the research – ‘A growth engine: Trends and outcomes of private equity in Africa’ – every 0.01 per cent increase will mean $200 million more investment and could easily reach $1.1 billion over the next five years. The report reveals a number of interesting trends about investment in Africa. Private equity investors in Africa tend to be distinct from other parts of the world, holding investments for longer than in developed markets and using less debt and improve corporate strategy and governance. Furthermore, they invest more in growth and job-creation, often scaling small businesses to a size viable for trade buyers.