The African Private Equity and Venture Capital Association (AVCA) has released its 2020 Annual African Private Equity Data Tracker report. The report provides data and analysis on Private Equity (PE) fundraising, deals and exits in Africa in 2020. It also gives insights on PE activity on the continent from 2015 to 2020.
Over the last year, the COVID-19 pandemic has had a significant impact on global supply chains and market activity. However, Africa experienced a less severe economic downturn compared to other regions of the world. According to the African Development Bank’s (AfDB) 2020 African Economic Outlook, Africa’s economy is projected to grow by 3% in 2021.
The new report further highlights the African PE sector’s resilience during a time of global uncertainty. As a result of the economic fallout precipitated by the Covid-19 crisis, the value of PE deals marginally declined to Ksh. 330 billion ($3.3 billion) in 2020, from Ksh. 388 billion ($3.8 billion) in 2019. However, the number of deals within the same period rose from 230 in 2019 to 255 in 2020.
The report also provides key learnings from doing business in Southern, West, North and East Africa, detailing the median deal size, in addition to the number and value of reported PE transactions in each region.
In total, 270 African PE exits were reported between the 2015-2020 cycle. The number of PE exits decreased to 33 in 2020, down from 44 in 2019, reflecting the global economic downturn spurred by the global healthcare crisis. Mirroring trends identified by AVCA in 2019, exits to Trade Buyers were the most common exit route in 2020 (46%), followed by exits to PE and other financial buyers, representing 33% of the total number of exits last year.
Notable exits announced in 2020 include
- African Infrastructure Investment Managers’ exit from Cookhouse Wind Farm in South Africa.
- Actis’ exit from GHL Bank, a full-scale commercial bank in Ghana.
- Helios Investment Partners’ exit from Africatel (Unitel), a sub-Saharan African telecommunications services provider.
- AfricInvest’s exit from Esprit, a private university in Tunisia.
Africa’s PE industry continues to stand by its fundamental principles: providing capital to maximize companies’ growth and progress Africa’s economies, especially during the recovery process from the impact of the COVID-19 pandemic.
Commenting on the report, Abi Mustapha-Maduakor, Chief Executive Officer at AVCA, said, “GPs and investors continue to find new ways to succeed in a challenging fundraising environment. As the report finds, geographic and sectoral expansion creates new opportunities to align impact with yields. Digital innovation in healthtech, fintech, edtech, cleantech and agritech are engineering Africa’s economic transformation.”