Private capital fundraising in Africa more than doubled in 2024 to $4.0 billion, marking the third-highest final close value on the continent in the past decade.
The growth signals renewed investor confidence and a shift towards local capital mobilisation, despite global macroeconomic headwinds.
According to the 2024 African Private Capital Activity Report by the African Private Capital Association (AVCA), infrastructure and private equity funds led the fundraising charge, each accounting for 30% of total capital raised during the year.
Development finance institutions (DFIs) remained the largest contributors, committing $1.4 billion, roughly 42% of the year’s fundraising total.
Local investor participation
However, the more notable trend was the surge in domestic investor participation. African pension funds, insurers, and corporates increased their commitments 3.7 times, from $171 million in 2022 to $639 million in 2024.
“The rise of African institutional investors, growing infrastructure allocation, and the rebound in exits all point to a deepening and maturing private capital market in Africa,” said CEO of AVCA, Abi Mustapha-Maduakor.
She added that private capital is increasingly driving long-term value across sectors, particularly through more strategic deal sizes and co-investment models that appeal to both global and local Limited Partners (LPs).
Dealmaking holds steady amid global volatility
Africa’s private capital ecosystem proved resilient in 2024, recording 485 transactions—an 8% increase in deal volume compared to 2023.
While overall deal value dipped slightly to $5.5 billion (a 7% YoY decline), the drop reflects a shift toward smaller, targeted investments as investors navigated global economic uncertainty.
- Private equity activity stood out, with deal volume jumping 51% year-on-year—reaching its highest point in more than a decade. Financials led the way, accounting for 23% of deal count and 33% of deal value.
- Consumer Staples followed closely, with deal volume surging 67% YoY and total value doubling, highlighting investor appetite for essential, resilient sectors.
- Regionally, Southern Africa recorded the highest deal count at 129, followed by West Africa (105), East Africa (99), and North Africa (77)—a reminder that dealmaking remains diverse across the continent.
Another key highlight from 2024 was a 47% rise in exit activity, with 63 recorded exits across Africa.
This marks a return to pre-pandemic levels as investors, having delayed exits in previous years, sought to take advantage of improving market conditions.
The increase also reflects growing pressure to return capital to LPs and prove liquidity, especially after a period of economic uncertainty and valuation volatility.
More insights
Despite robust activity, Africa-focused fund managers are still sitting on significant unallocated capital.
- AVCA estimates that $10.3 billion in dry powder was available at the close of 2024, representing 36% of total commitments secured between 2018 and 2024.
- At the current deployment pace of $4.9 billion per year, these funds provide a roughly two-year runway.
- Private equity and infrastructure funds hold the lion’s share of the reserves, accounting for 35% and 30%, respectively, while private debt and venture capital hold 18% and 12%.