Africa’s private capital market recorded a significant rebound in the second quarter of 2025, with total private investment nearly doubling to $3 billion, driven largely by a surge in mega deals and increased debt financing across key sectors.
According to the Q2 2025 Private Capital in Africa Report by Stears and the East Africa Venture Capital Association (EAVCA), the continent witnessed 147 private capital transactions, up from 125 in Q1 2025 and 137 in Q2 2024. This marks a notable recovery in deal flow after a relatively muted first quarter.
The disclosed transaction value surged from $1.6 billion in Q1 to $3 billion in Q2, though still slightly below the $3.7 billion recorded in the same period last year. Analysts attribute this recovery to a sharp increase in mega deals—transactions exceeding $75 million—which accounted for 11 percent of disclosed deals, up from 5 percent in Q1 2025.
Conversely, the share of micro and small deals dropped from 54 percent to 49 percent, while large deals in the $25 million to $75 million range declined from 25 percent to 16 percent, reflecting a growing investor appetite for high-value, strategic investments.
The report highlights that debt financing remained a major driver of private capital activity, particularly in agriculture and energy, which jointly accounted for 40 percent of all debt-financed transactions.
Agriculture: Debt made up 85 percent of all agricultural deals, a reflection of the sector’s preference for working capital support to scale production and expand agribusinesses.
Energy: The capital-intensive nature of energy projects also made them heavily reliant on debt financing, backed by stable revenue streams and long-term contracts.
Consumer Goods & Services also saw significant debt involvement, accounting for 35 percent of its transactions and contributing 26 percent of total debt deals across Africa.
In terms of sectoral performance, Consumer Goods & Services overtook Financial Services as the most active sector in Q2 2025, representing 27 percent of all transactions. Financial Services followed closely with 24 percent, while technology and energy & utilities accounted for 18 percent and 14 percent, respectively.
According to Stears, consumer goods and financial services jointly contributed 52 percent of all transactions, slightly lower than 55 percent in Q1 2025 but well above 41 percent in Q4 2024, signaling continued investor confidence in these sectors.
The financial services sector dominated mergers and acquisitions (M&A) activity during the quarter. Key transactions included:
Access Bank’s $100 million acquisition of National Bank of Kenya, strengthening its East African presence.
Egypt’s first-ever SPAC merger, where Catalyst Partners Middle East SPAC acquired digital lending platform Qardy, signaling growing investor interest in fintech.
The report also provided insights into regional investment dynamics:
Central Africa: Though representing just 7 percent of total private capital activity, the region accounted for 13 percent of all debt deals, driven largely by energy and commodity investments.
East Africa: Debt represented 46 percent of all transactions, contributing 40 percent of Africa’s total debt volume.
Southern & West Africa: Equity financing dominated, but structured debt remained significant, accounting for 15 percent and 13 percent of transactions, respectively.
Sectoral leadership also varied by region, with consumer goods leading in East and Southern Africa, while financial services and energy & utilities dominated in West, North, and Central Africa.
Despite regional disparities, the report suggests that Africa’s private investment landscape continues to offer opportunities for investors seeking long-term value. With consumer goods, financial services, and energy projects attracting significant funding, analysts project sustained investor interest, particularly in sectors with strong cash flow and scalable growth prospects.