Online Reporter
Despite growing global uncertainty, a majority of private equity investors are doubling down on South Africa and Kenya as their top investment destinations over the next three years, even as U.S. President Donald Trump’s tariff policies cast a shadow over Africa’s fundraising prospects for 2025.
According to the African Private Capital Association (APCA), more than 65 percent of general partners at private equity firms ranked South Africa and Kenya as their most attractive markets. Egypt and Nigeria followed, with around 50 percent of respondents highlighting them as key targets.
However, optimism is tempered by concerns and over one-third of investors expressed pessimism about raising capital this year, citing pressures from currency depreciation across African economies and the ripple effects of Trump’s protectionist trade stance, Bloomberg reported.
Investment on the continent dropped by 11 percent since the start of 2024, extending a downward trend that began in 2023.
The slowdown has been driven by global economic headwinds, persistent inflation and high interest rates, which have made investors more risk-averse. As a result, large-scale deals have become increasingly rare, with smaller, lower-risk transactions now dominating the landscape.
In the latest survey conducted by the London-based association, two key concerns still stood out. “Exchange rate volatility on the continent” topped the list, cited by 84 percent of respondents. The second major concern, noted by 59 percent of investors, was the “America-first investment approach,” which they fear could significantly affect foreign investment from US-based firms. Venture capital funding for African startups fell by 22 percent to US$3,6 billion last year, according to a separate report by the African Private Capital Association released earlier this month. — Business Insider Africa
Peter Tanyanyiwa