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The Economic Impact of Covid-19 is starting to Show Up in Private Equity Activity and Deals in Africa

With the continent’s largest economies on the brink of recession and investors looking to be more capital efficient while the effects of the pandemic unfold, private equity activity is slowing down across Africa in comparison to recent years. In the first half of the year the value of private equity deals on the continent is on pace for a 63% drop compared to last year, says a report from the African Private Equity and Venture Capital Association (AVCA). The value of the 81 private equity deals reported stood at just $700 million. There’s a similar lag in the amount of funding raised by private equity players as well with $1.1 billion raised in the first half of the year, counting interim and final closes. If similar levels are maintained through the rest of the year, private equity fundraising on the continent will also record its lowest total in six years. In a similar vein, private equity exits have also slowed down with only 13 recorded in the first half of 2020.