According to the latest report from the African Private Capital Association (AVCA), Africa experienced a decline in total private capital deal volume for the first time since 2016, with a year-over-year decrease of 28% to 450 deals.
The 2023 AVCA annual report provides comprehensive insights into dealmaking, fundraising, exits, and the prevailing trends shaping Africa’s private capital landscape. Despite volatile market conditions, Africa’s dealmaking activity was not immune to the global slowdown in private capital, resulting in reduced investment levels across the continent.
However, Africa’s performance remained relatively robust compared to other regions like North and Latin America, which witnessed more significant declines in deal activity.
The report highlights Africa’s resilience, as it returned to a steady growth trajectory in 2023 after the deployment of large reserves of capital that had been held back during the COVID-19 pandemic. Although there was a decrease in transaction volume, Africa showed resilience and surpassed the annual deal volume averages observed over the last decade.
Southern Africa emerged as one of Africa’s top investment destinations in 2023, attracting 119 capital investments totaling US$2.6 billion, alongside West Africa. South Africa led the way in Southern Africa, with significant investments in the IT and industrial sectors, as well as a rise in venture capital investments in software and services, logistics, and transportation.
Despite a year-over-year decline in volume, Africa recorded 43 exits in 2023, marking a return to pre-2022 averages. Economic challenges in 2023 halted the exit rush experienced in Africa in 2022, driven by fund managers addressing mature portfolio companies from the COVID-19 pandemic.
Abi Mustapha-Maduakor, CEO of AVCA, commented, “Despite global economic challenges, we are encouraged to see the continued commitment of Africa-focused investors to the continent, particularly in venture capital, which remains the continent’s leading asset class.”
