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Adrian Mayer chairs conference on the role of private equity investment in Africa

17 May 2016

On 10 May, partner Adrian Mayer moderated a panel discussion on The Role of Private Equity in Realising Africa’s Investment Potential as part of a 2016 City Week Symposium entitled “China, India and Africa: New Investment Opportunities”.

Adrian is a member of the Africa Focus Group, within the African Private Equity and Venture Capital Association. At the session he shared his long-standing legal expertise in advising on transactions and investments for our clients operating in Africa. The panel included a keynote address by James Duddridge MP, Minister for Africa, Foreign and Commonwealth Office, UK.

Key findings

In 2015 the currency instability, the impact of lower commodity prices in sub-Saharan Africa, and political tensions in the north of the continent, combined to reduce the growth rate to 3.8%. Nonetheless, the prospects for Africa remain bright in the medium to long-term. This prognosis is underpinned by rapid urbanisation, a growing middle-class population, favourable demographics and increasingly business-friendly policies in many African countries. In spite of an acknowledgement that there are various social and political issues that can hinder progress; there was a recognition of private equity as an enabler for growth, development and empowerment on the continent.

Key observations included:

  • The continent has become the second most attractive investment destination in the world – ranking just behind North America - as investors are looking beyond the more established markets of South Africa, Nigeria and Kenya.
  • Foreign direct investment (FDI) in the region has hit a record $60 billion, five times its 2000 level.
  • There is a growth in intra-regional trading. A recent industry report categorised intra-regional trade as one of the five priorities for inclusive and sustainable growth.
  • Family businesses control a significant portion of Africa’s economy. It is important to understand they should be handled more sensitively than other non-family owned businesses. Emotions run high around investment dealings with family businesses and generational tensions need to be actively managed for the benefit of all.
  • Over 90% of employment in Africa is provided by the private sector so the investments made by private equity are significant and important for sustainable growth, empowerment  and also in job creation.
  • Africa had some of the fastest population growth rates on the planet – four of the fastest growing cities in the world are in Africa.

The panel session was well received and the input of the UK Government and representatives of private community at the session was engaging and informative.

We have been advising clients operating in Africa for many years, both those located in the region (North Africa or Sub Saharan Africa) as well as international clients who are investing or operating there. Our strategic focus on providing business services advice across our key sectors means we are able to add valuable input to inform our clients’ investment decisions and bring our experience to bear on the work they do in Africa.

For more information about the Africa Focus Group and our work in Africa, please contact Adrian Mayer, Partner, on +44 (0)1242 246339.