Venture capital deals in Africa plunged by 36% in Q3

Key Takeaways

The African private capital industry has faced a confluence of multiple challenges that began in 2022 and persisted into the third quarter of 2023. These challenges include high inflation, exchange rate pressures, foreign exchange shortages, and weak export performance. While central banks in major African economies like South Africa, Kenya, and Ghana maintained their interest rates in September 2023, there was hope that the third quarter would bring some economic relief. However, despite stabilized interest rates, inflation remains high in many African countries, and the projected GDP growth rate for Africa is expected to slow to 3.3% by the end of 2023. In this context, private capital activity in Africa has continued to contract in the first nine months of 2023, reflecting the prevailing global market uncertainty. Investments, exits, and fundraising have all slowed since the latter half of the previous year, indicating ongoing challenges in the landscape.