A new report by pan-African market insights firm Stears reveals that Africa’s financial services sector has emerged as the most attractive for investors, according to Stears Private Capital in Africa Report: Q3 2024.
In the third quarter of 2024, financial services accounted for 33% of all private capital deals, surpassing other sectors like consumer goods and energy.
Key Findings:
- Financial Services Dominance: The sector captured a third of all private capital deals, with payments and MSME lending as key sub-sectors.
- Geographic Focus: Kenya and South Africa were the most active markets, driving deal activity through private equity, private debt, venture capital, and M&A.
- E-commerce Growth: The e-commerce sector continued its upward trajectory, accounting for 27% of consumer goods and services deals, driven by the rapid growth of digital marketplaces.
- Agriculture Potential: Despite its significant role in Africa’s economy, the agriculture sector received a relatively smaller share of private capital deals. However, there’s growing interest in production-focused investments.
- Equity Dominance: Equity investments dominated private capital transactions, accounting for 75% of deals. Debt financing was concentrated in agriculture and energy.
- Regional Leadership: South Africa and Kenya emerged as regional leaders, contributing significantly to deal activity in Southern and East Africa, respectively.
- Big 5 Dominance: The Big 5 economies (South Africa, Kenya, Nigeria, Ghana, and Egypt) accounted for 85% of all deals, highlighting their investor appeal and enabling environments for innovation.
