West Africa more and more attractive to PE funds

Apr 02, 2014

West Africa has for the third time in three years registered more private equity (PE) deals than Southern Africa, according to financial advisory firm Deloitte.

West Africa has for the third time in three years registered more private equity (PE) deals than Southern Africa, according to financial advisory firm Deloitte.

It had the highest reported value of deals, reaching $545 million (€395 million) during 2013, surpassing Southern Africa ($491 million) and Eastern Africa ($163 million), according to the 2014 Deloitte’s East Africa Private Equity Confidence Survey.

Statistics also show that in 2012, private equity deals in West Africa reached $298.45 million compared to Southern Africa’s $241.9 million, the Financial Times
reports.

With a population of 170 million and a decade of annual growth rates around seven percent, Nigeria is mostly responsible for PE funds' interest in West Africa, offering some outsized returns for investors.

Last year, the country overtook Ireland to become the biggest market for Guinness, while brands from Porsche to men's luxury clothes brand Ermenegildo Zegna have all opened shops recently.

"It's caught on with investors. They recognise that there's a resemblance to what we saw in Asia [in the 1980s] and those who missed the incredible growth story now have the opportunity to invest in the next growth story," said Charles Robertson, global chief economist at Renaissance Capital, quoted by The Guardian.

The report suggests other countries for private equity interest. "Ghana and Tanzania drew a nice mix of small and large deals in 2012 and 2013," it explains, adding that Cote d’Ivoire has emerged as a regular destination for funds, thanks to the country’s “strong growth, stable politics and solid infrastructure.ADNFCR-2976-ID-801709026-ADNFCR