Economy
Private Capital Slowdown in Africa Mirrors Global Investment Trends
The African Private Capital Association – today announced the release of the 2023 African Private Capital Activity Report, the anticipated annual report providing insight into dealmaking, fundraising, exits and the key trends shaping Africa’s private capital landscape.
In 2023, the global economy faced a series of interconnected shocks, including rising political tensions, increasing fragmentation in global trade, escalating interest rates and tightening monetary policies to address high inflation. Amidst volatile market conditions, dealmaking in Africa was not shielded from the global slowdown in private capital, leading to reduced investment activity on the continent. However, Africa experienced more robust performance than other regions, such as North and Latin America, which noted comparatively larger declines in deal activity.
Private capital activity resets after post-pandemic highs
In the new report, AVCA found that Africa’s total private capital deal volume declined for the first time since 2016, falling by 28% year-over-year (YoY) to 450 deals. Despite a reduction in the number of transactions, Africa showed resilience, returning to the steady growth trajectory the region drove until 2022 when investors deployed large reserves of capital that were not allocated during the Covid-19 pandemic. Compared with activity throughout the last decade, 2023 was the second-strongest year on record for deal volume in Africa. Notably, deal volume on the continent surpassed the annual average of 264 deals from 2012 to 2022 and the average of 387 deals from 2019 to 2022.
Venture Capital and Infrastructure drive investor appetite
Continuing established trends, investors favoured venture capital (VC) as the route to back promising African businesses with innovative, tech-enabled solutions in rapidly developing markets. VC maintained its four-year streak as Africa’s leading asset class, accounting for 68% of the total investment volume of private capital activity across the continent in 2023.
The report notes that infrastructure had an impressive year for capital raising and deployment as the only asset class to benefit from increased funding in 2023, with deal values surging to US$1.8bn – a remarkable threefold YoY increase. Investments in renewable energy largely fueled this trend, indicating a growing interest in leveraging Africa’s abundant solar, hydro, biomass, and wind potential to accelerate the clean energy transition.
Shifting trends and familiar patterns
In a departure from previous years, Southern Africa reclaimed its dominance as one of Africa’s top investment destinations. The sub-region attracted 119 capital investments at US$2.6bn, the highest volume (together with West Africa) and the value of deals across the continent. South Africa accounted for the majority of investments in Southern Africa, with 81% of deals in the sub-region, due to growth across the IT and industrial sector and a rise in VC investments in software and services, logistics and transportation.
In line with AVCA’s previous research, the Financials, Information Technology, and Consumer Discretionary sectors remained the most attractive sectors, accounting for 54% of the total volume of private capital deals in 2023. This trend replicates investor activity noted in previous years as digital financial services and e-commerce expand to meet growing consumer demand, presenting more opportunities for investors.
Final close funds show a modest decline and interim fundraising surges
Notwithstanding final closed funds declining by 9% YoY, investors continued a trend of increasingly high values of capital raised for private debt and VC funds. Interim fundraising also surged across the continent, with Africa-focused fund managers achieving 40 interim closes. The uptick in private debt interim fundraising underscored growing interest in private debt as an asset class, stepping in to fill the gap left by commercial banks as investors seek protection from rising interest rates.
Exit market resets to pre-2022 averages
Despite a 48% YoY decline in volume, Africa recorded 43 exits in 2023, which marks a return to pre-2022 averages of 42 per year. All sub-regions in Africa experienced a YoY decline. Economic challenges were exacerbated in 2023, ending the exit rush in Africa of 2022 led by fund managers dealing with a backlog of mature portfolio companies from the Covid-19 pandemic. Southern Africa, demonstrating its position as a mature exit market, was the most popular sub-region for exits, increasing its overall share of exits to 36% YoY.
Abi Mustapha-Maduakor, Chief Executive Officer, AVCA, said: “Despite global economic headwinds, we are pleased to see Africa-focused investors’ ongoing commitment to the continent, particularly in venture capital – the continent’s leading asset class. Whilst there were dips in investment activity across many asset classes, infrastructure proved to be resilient, as the only asset class to receive increased funding during the year. Based on this report, our expectation for the coming year is that investors will remain committed to investment opportunities that leverage disruptive tech on the continent.”
By Adedapo Adesanya
The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has said from the N15.8 trillion in subsidy savings, N5.4 trillion went to the federal government, and N10.4 trillion was shared between the 36 states and the 774 local governments of the federation between June 2023 and December 2025.
Mr Oyedele disclosed this on Wednesday in Abuja while presenting the federal government’s Nigeria’s Reform Scorecard: The Benefits, Costs and Harms Prevented, an assessment of the economic reforms implemented under President Bola Tinubu.
The finance minister said the N15.8 trillion in subsidy savings was distributed through the Federation Account, rather than being retained entirely by the federal government.
According to him, the central government received N5.4 trillion, representing about 34 per cent of the total savings, the states received N6.5 trillion, or 41 per cent, and the local councils received N3.9 trillion, representing about 24 per cent.
The combined N10.4 trillion allocated to states and local governments accounted for almost two-thirds of the total subsidy savings and was nearly twice the amount received by the federal government.
Mr Oyedele clarified that the N15.8 trillion should not be understood as money accumulated in a dedicated government account labelled “subsidy savings”.
Rather, he said the impact of the reforms was reflected in increased resources available to the federation through higher revenue collections, which were subsequently shared among the three tiers of government through the Federation Account.
The minister said the federal government’s N5.4 trillion share formed only one component of the additional resources available to it during the period.
It also recorded N3.1 trillion in incremental independent revenue, mainly from remittances by government-owned entities, and obtained N11.9 trillion in incremental borrowing.
Together, the three sources provided the federal government with N20.4 trillion in incremental resources between June 2023 and December 2025.
Mr Oyedele said the distribution of the subsidy savings underscored that the reform was not designed simply to increase Federal Government revenue, as a substantial portion of the additional resources accrued to the sub-national governments.
“The reform was never introduced for revenue purposes, but to address entrenched corruption in an artificially managed fuel subsidy and foreign exchange market,” he said.
He added that the federal government subsequently deployed its additional resources, alongside funds from its existing revenue base, to meet N30.64 trillion in incremental expenditure during the period.
Of the N20.4 trillion in incremental resources available to the federal government, borrowing accounted for 58 per cent, subsidy savings for 27 per cent and other revenue for 15 per cent.
The minister said the figures provided a clearer picture of how the financial impact of the subsidy reform was distributed across the Federation, with states and local governments collectively receiving the largest share.
By Aduragbemi Omiyale
The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Plc has expressed satisfaction with the growing participation of non-interest financial institutions in its credit risk guarantees for loans to farmers, processors, aggregators, exporters and other businesses across multiple agricultural value chains.
The chief executive of the non-bank financial institution created by the Central Bank of Nigeria (CBN) to de-risk agricultural lending in the country, Mr Sa’ad Hamidu, said non-interest lenders accounted for well over 50 per cent of the loans guaranteed by NIRSAL in the first half of 2026.
In 2025, the company guaranteed more than N100 billion to beneficiaries, and according to Mr Hamidu, this figure has already been surpassed in 2026 year-to-date.
Speaking at the AFRACA Masterclass on Inclusive Finance for Climate Resilience and Artificial Intelligence for Financial Services and Agricultural Finance in Lagos, the NIRSAL chief stated that the trend demonstrates what becomes possible when appropriate risk-sharing frameworks create sufficient confidence for different forms of capital to participate in agriculture.
“At NIRSAL, we have always maintained that agriculture, especially in sub-Saharan Africa, is not underfinanced because opportunities do not exist, but because the risks have not been sufficiently understood, measured, appropriately priced, and managed,” Mr Hamidu, represented by the agency’s Executive Director of Operations, Mr Ewaen Imohe, said.
He explained that NIRSAL’s response has been to co-develop systems and financing frameworks that bring greater structure to agricultural value chains, better define and mitigate their risks, and improve financiers’ understanding of the sector and confidence to lend.
The NIRSAL boss described the masterclass as particularly timely, noting that climate change is no longer an abstract global concern but a practical reality confronting farmers, agribusinesses and their financiers every production season across Africa.
The programme’s first major theme, Inclusive Finance for Climate Resilience, exposed participants to the concepts, tools, and approaches required to understand climate risk and develop financeable adaptation and mitigation projects.
For the second major theme, Artificial Intelligence for Financial Services and Agricultural Finance, Mr Hamidu expressed the expectation that participants would move beyond the excitement surrounding AI to examine how it can improve risk understanding, transaction assessment, and financial decision-making in agriculture.
He also pointed to opportunities for technology to complement climate finance, blended finance, grants, and other innovative mechanisms capable of expanding the financial and technical resources available to African agriculture.
On deepening AFRACA-NIRSAL collaboration, he stated that, “AFRACA, for us, is a platform for knowledge, continental exchange, and global insight. On our part, we remain a results-driven source of practical experience for AFRACA member countries.”
By Adedapo Adesanya
The Central Securities Clearing System (CSCS) Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.36 per cent on Wednesday, August 19, slicing the market capitalisation of the platform by N9.41 billion to N2.60 trillion from N2.610 trillion, and reducing the NASD Security Index (NSI) by 15.67 points to 4,333.09 from 4,348.76 points.
The securities depository company lost N10.30 at midweek to close at N88.12 per share versus Tuesday’s closing price of N90.02 per share.
This offset the 38 Kobo gained by Golden Capital Plc during the session. The stock traded at N14.05 per unit compared with the preceding day’s N13.67 per unit.
Yesterday, the volume of securities soared by 557.2 per cent to 747,429 units from 113,728 units, the value of securities jumped by 934.0 per cent to N9.4 million from N375.7 million, and the number of deals increased by 35.5 per cent to 42 deals from 31 deals.
Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units exchanged for N6.5 billion, and CSCS Plc with 79.9 million units worth N5.8 billion.
GNI Plc also finished the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units transacted for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units sold for N415.7 million.
