Africa sees sharpest decline in private capital deals since 2012
TLDR
- 2023 marked a global downturn in private capital investment activity, with a 35% decrease in deal volume and a 22% decline in deal value.
- Africa experienced its first decline in deal volume since 2016, with a sharp 28% year-over-year decrease, and total deal value decreased by 22% to $5.9 billion.
- Market uncertainties impacted deal-making worldwide, including Africa, reflecting challenges and ramifications in the private investment landscape.
Amidst a backdrop of uncertainty, volatile market conditions presented significant obstacles and ramifications for deal-making on a global scale, inevitably influencing the course of private investments.
In particular, the year 2023 witnessed a downturn in global private capital investment activity, characterized by a 35% decrease in deal volume and a 22% decline in deal value.
Africa was not immune to these challenges. Fueled by the negative global spillovers, the continent saw its first decline in deal volume since 2016, marking the sharpest drop in 12 years with a 28% year-over-year decrease while total deal value fell 22% to $5.9 billion.
Key Takeaways
In 2023, persistent economic uncertainty loomed over private capital activity in Africa, extending the challenges encountered in the previous year. Despite navigating the economic headwinds of 2022 with limited success, Africa's private capital landscape faced yet another demanding year, impacting deal-making across the continent. Inflation emerged as a significant concern in Africa, reaching an average of 17.8% in 2023, the highest recorded in over a decade. This upward trend was driven by global factors such as increased food and energy prices, compounded by domestic issues including fiscal challenges, disruptions in agricultural supply chains, and depreciation of national currencies against the US dollar.
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