Kenya has been ranked the third most attractive African market for private equity (PE) funding, indicating the huge promise in East Africa’s largest economy despite multiple challenges arising from a recent pile-up of public debt.
Kenya’s fast-growing technology sector, drew the most foreign investor interest, supported by an improved business environment.
South Africa and Morocco are ranked as Africa’s top hotspots for PE deals ahead of Kenya, which beat Nigeria, Ethiopia and Egypt – the number four, five and six respectively.
The report says Kenya’s top ranking has benefited from recent government’s action to make the country a viable and competitive technology hub through formulation of policies to drive the initiative.
The country’s performance is described as significant given that 2017 was dominated by election-related investor jitters.
Kenya’s economy grew 4.9 per cent in 2017, its lowest rate in five years, under the weight of a prolonged electoral process and adverse weather.
The last time Kenya’s growth stood at below five per cent was in 2012, also an election year, when the economy expanded by 4.5 per cent.
British investors were particularly active in Kenya last year, having made 10 project commitments, followed by Dutch firms.
Kenya is expected to remain a hotspot for private equity whose attraction to global deal makers was mainly driven by improved business environment.
“Recent initiatives in Ethiopia, as well as gains by Kenya and Nigeria in the World Bank Ease of Doing Business scores, illustrate that more and more of Africa’s leaders are starting to prioritise reform,” it says.
“Along with that, recent leadership changes in Angola, Ethiopia, South Africa and Zimbabwe are also expected to stimulate policy change, as countries increasingly compete for foreign investment as a key driver for sustained growth.”
Recent studies have echoed similar projections while noting that the improvement in ease of doing business, high return potential across all sectors, a well-diversified economy and consolidation in sectors such as financial services has created an avenue for increased PE activity.
[BUSINESS] Kenya ranked third in Africa’s private equity chart: Kenya has been ranked the third most attractive African market for private equity (PE) funding, indicating the huge promise in East Africa’s la.. https://t.co/JLCG2Am68W
— Breaking News (@News_Kenya) October 29, 2018