Nairobi — Kenya is among 4 countries, including Nigeria, South Africa, and Tunisia, that continue to be top African investment hotspots.
The 2024 Deloitte Africa Private Equity Confidence Survey (PECS) report, which provides insights into how private equity (PE) practitioners view the African PE landscape over the next one year, indicated that despite economic uncertainties, the country has proven to have a favourable business environment for investors.
The study noted that Kenya continues to be the most attractive economy to investors, with most respondents expecting to focus their funds on East Africa's largest economy over the next 12 months.
"Despite economic uncertainties, PE's resilience, and ability to identify opportunities have been instrumental in sustaining businesses and driving economic recovery. Kenya, Nigeria, South Africa, and Tunisia continue being Africa's investment hotspots," the report revealed.
The report showed that the next largest focus of funds is expected to be on Kenya, Uganda, and Tanzania, similar to the firm study conducted during the same period last year.
Kevin Kimotho, Deloitte East Africa Private Equity Leader, affirmed that timely policy reforms and regulatory changes across East Africa have created an unparalleled opportunity for PE investment in the region.
"For PE firms, this convergence of favourable conditions across East Africa is not merely an opportunity for profitable exits, but a significant moment to shape the future of the region's economic landscape," said Kimotho.
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He noted that despite the Kenyan government recently approving and publishing a list of 26 public institutions earmarked for privatisation, the decision targets creating a more dynamic and private-led economy.
"While public entities poised for privatisation offer sizable investment potential, successful privatisation, and increased investor confidence will largely be predicated on how the government streamlines the privatisation process, including rationalising the regulatory framework, simplifying the transaction approval process, and increasing public awareness," added Kimotho.
The report underscored a continued positive trajectory for PE activity even though deal sizes are expected to remain moderate, with investors navigating challenging conditions and anticipating increased exit activity, primarily through secondary sales.
The report, which surveyed general partners (GPs) and limited partners (LPs) on their views on the economic climate, the country focus of funds, the investment landscape, the fundraising environment, and the sector focus across the continent, stated that 62 percent of respondents in the East Africa region believe the economic climate will improve in the next 12 months, with 34 percent expecting it to remain the same.
This contrasts with respondents' views from last year, when most respondents expected the economic climate to remain the same.
