Private equity investment into Africa more than tripled in 2011 to reach USD 3 billion, and that figure is set to rise further as investors move into consumer products and services on the continent instead of the traditional targets of natural resources, infrastructure and renewable energy, according to the Chief Economist of the African Development Bank (AfDB).
In his latest blog, Dr Mthuli Ncube, reports that “private equity investors closed USD 3 billion worth of deals in Africa, up from USD 890 million in 2010.”
As a result, sub-Saharan Africa now accounts for six percent of total emerging markets private equity investment, double the 2007 share of three percent.
Currently, approximately 200 equity investors are actively involved in the African market, according to Dr Ncube. He reports: “Beyond traditional development institutions and institutional investors, more global frontier investors are exploring opportunities in Africa, seeking to diversify risk, improve efficiency and unlock value.”
The bulk of equity funds attracted to Africa are “specialized funds’, focusing on natural resources, infrastructure and the renewable energy sectors.
But the emphasis is changing, according to Dr Ncube. “However, funds targeting other sectors, principally those driven by the growing appetite of Africans for quality consumer products and services, are poised to be the main drivers of private equity to the region in the coming years,” he maintains.