Private Equity in Africa: A Decade in Review

A comprehensive review of private equity activity across Africa over the past decade, with insights on where the next wave of investment is heading.

The 2010s were a defining decade for private equity in Africa. The decade opened with a powerful growth narrative and a wave of new funds, was tested by commodity price collapses and sharp currency devaluations, and ended with a more mature, more selective industry. Understanding what happened over those ten years helps business owners and investors anticipate where the next wave of capital is likely to go.

The early 2010s: the "Africa Rising" thesis

At the start of the decade, strong GDP growth across many African economies, rising commodity prices and a growing urban middle class attracted significant investor attention. The investment thesis centred on consumer demand: as incomes rose, demand for retail, fast-moving consumer goods, financial services, healthcare and education would grow rapidly. Global and regional private equity firms raised new Africa-focused funds, and international investors that had never looked at the continent began to do so.

Mid-decade: a reality check

From 2014, falling oil and commodity prices hit several of the continent's largest economies hard. Major currencies weakened significantly; Nigeria and Egypt, for example, both saw large devaluations in 2016. For investors measuring returns in US dollars, strong local-currency performance could translate into disappointing dollar returns. Consumer growth also proved slower and more uneven than the most optimistic forecasts had suggested.

The lesson was clear: macroeconomic and currency risk had to be priced explicitly, and the consumer thesis needed to be applied far more selectively.

The late 2010s: maturity and selectivity

By the end of the decade, the industry had adapted:

• Sector focus shifted toward businesses with more resilient demand or hard-currency earnings, including financial services, technology, healthcare, telecoms infrastructure, logistics and agribusiness.
• Venture and growth capital expanded, especially in fintech, as technology-enabled businesses attracted a new generation of investors.
• Deal structures evolved, with more attention to currency protection, minority protections and governance rights.
• Operational value creation became central, as investors recognised that returns would increasingly come from improving businesses rather than riding macroeconomic growth.

The role of development finance institutions

Throughout the decade, development finance institutions (DFIs) such as the IFC, CDC Group, Proparco and others were among the most important investors in African private equity funds. Their capital, standards and long-term horizon helped build the industry, and their environmental, social and governance requirements raised standards across portfolio companies.

The persistent challenge: exits

Exits remained one of the industry's hardest problems. With relatively shallow public equity markets in many countries, most exits came through trade sales to strategic buyers or secondary sales to other private equity firms rather than IPOs. Planning for exit from the start of an investment, including identifying likely buyers, became an essential discipline.

What the decade taught us

Where is the next wave heading?

Entering the new decade, several themes look set to attract capital: technology-enabled financial services and payments, healthcare and pharmaceuticals, renewable energy and infrastructure, logistics and supply chain, agribusiness and food processing, and education. The African Continental Free Trade Area, whose founding agreement entered into force in 2019, could also make regional champions, businesses able to operate across several markets, increasingly attractive targets.

What this means for mid-market business owners

For founders and owners seeking private equity investment, the decade's lessons translate into practical advice: build strong governance and reliable financial reporting early, understand and manage your currency exposure, be clear about how investors will eventually exit, and demonstrate a credible plan for operational improvement and growth.

Key takeaways

• The 2010s began with a consumer-driven growth thesis and high expectations.
• Commodity price falls and currency devaluations mid-decade forced a reset.
• By decade's end, investors were more selective, with a focus on resilient sectors and operations.
• DFIs played a central role in building the industry and raising standards.
• Governance, currency management and exit planning are now essential for attracting capital.

Our Governance & Risk and Growth Strategy teams help mid-market firms prepare for investment, from governance to growth planning.