KEY POINTS
- Africa was the only region globally to record private capital deal growth last year.
- East Africa’s deal value surged 75% year-on-year, driven by renewable energy investments.
- Rising fuel prices are pushing African countries toward local clean energy solutions and businesses.
Africa’s private capital market grew last year when almost everywhere else did not. Deal activity rose 8%, making the continent the only region globally to record growth in investment transactions, even as the total value of those deals continued to slide.
Total private capital investment fell to $5.1 billion, the third consecutive annual decline, though the pace of that drop slowed. The picture is uneven, but the direction of travel on deal volume points toward growing investor appetite, particularly in clean energy.
Geopolitics is reshaping the energy calculus
Abi Mustapha-Maduakor, CEO of the African Private Capital Association, said the current environment of geopolitical disruption is likely to push more capital into renewable energy projects across the continent.
“What we are predicting is that we’re going to see even more renewable energy transactions,” she said.
Rising fuel prices linked to global supply disruptions have already forced several African governments to act. Kenya, Rwanda, Zambia, Tanzania, Namibia and South Africa have all raised regulated fuel prices in response, with some introducing subsidies and tax measures to cushion the blow for consumers.
That pressure is accelerating interest in local energy solutions and businesses with less exposure to imported raw materials. The logic is straightforward: energy security and cost control are now the same conversation in much of Africa.
Where the money is going
The financial sector attracted the largest share of private investment last year, followed by information technology. Regionally, Southern Africa held its position as the top destination for private capital.
East Africa, however, recorded the sharpest growth. Deal value in the region surged 75% year-on-year, driven largely by renewable energy and distributed power investments. That growth reflects rising demand for decentralized and resilient energy systems across a region where grid access remains uneven.
Mustapha-Maduakor said institutional investors have continued to allocate capital, and fund managers have maintained activity despite the broader value decline. She stopped short of predicting a further acceleration.
“It’s a bit early for us to predict whether deal activity will increase and outpace what we saw last year,” she said.
