Oxford Business Group evaluates Africa’s private equity, VC industry amid COVID-19

Daily News Egypt
5 Min Read

The global research and advisory company, Oxford Business Group (OBG), has produced a new COVID-19 Response Report (CRR), in partnership with the African Private Equity and Venture Capital Association (AVCA).

The report highlights the investment opportunities that have emerged in essential sectors.

It also showcases how Africa’s private equity (PE) and venture capital (VC) industry have dealt with the challenge of supporting the continent’s economies and companies through the novel coronavirus pandemic. This is particularly relevant given the report’s assurance of further continent-wide resilience, recovery, and growth.

Entitled “Private Equity and Venture Capital in Africa”, the CRR provides in-depth analysis of the industry’s response to the pandemic in an easy-to-navigate and accessible format. It contains key data and infographics relating to trends and developments in PE and VC.

The report traces the evolution of PE in the region, from its early days in the hands of development finance institutions, to the arrival of global institutional investors and the development of Africa-focused funds.

There is detailed coverage of the way in which activity has expanded from a focus on consumer industries to include other sectors. These range from renewables, infrastructure, and real estate to information technology and industrials.

Geographical shifts are also explored, with analysis provided of PE expansion and trends across Africa by region. The report details the continued attractiveness of established PE markets within Africa, such as South Africa, Nigeria, Kenya, Egypt, Morocco and Ghana. At the same time, it explores opportunities for PE investment in the post-COVID-19 era in other regions.

In addition, the CRR tracks the development and expansion of the VC ecosystem and the maturation of the entrepreneurial space in sub-Saharan Africa. It explores recent opportunities for VC investment, highlighting the most attractive verticals and sectors, including agriculture, ICT and renewable energy.

The impact of COVID-19 on African PE and VC is also examined, with the report documenting the consequences of the initial shocks following the arrival of the virus.

It also considers both the resilience demonstrated by the industry, and what it meant for some regions and sectors to be less affected by the pandemic than others.

The CRR contains several viewpoints by high-profile industry representatives, and case studies on topical issues related to PE and VC.

Additionally, it includes key findings from key AVCA publications, including the African Private Equity Industry Survey, published in March, the AVCA Venture Capital in Africa report, released in June, and the AVCA H1 Private Equity Data Tracker.

AVCA’s Interim CEO Dara Owoyemi said, “At a time of global uncertainty and concerns over public health and safety, institutional investors and fund managers have provided support and additional liquidity to investee companies to enable ongoing operations and trade, as a result – protecting jobs and livelihoods. For some, this is a time of difficulty.”

Owoyemi added, “For others, this is a time of vast opportunity, but for all, it is a time of change and transformation.”

Karine Loehman, OBG’s Managing Director for Africa, said that a combination of PE expansion and diversification efforts across Africa were expected to further boost investor interest in the region.

”The initial signs emanating from this pandemic are that Africa remains as attractive an investment destination,” she said, “Given that the pandemic has widened funding gaps for several governments, we may well also see additional investor-friendly measures introduced across a number of markets, including initiatives related to the regulations governing PE.”

The CRR forms part of a series of tailored reports which the global research and advisory company is currently producing with its partners. They are published alongside other highly relevant, go-to research tools, including a range of country-specific COVID-19 Economic Impact Assessment articles and interviews.

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