Africa emerged as the only global region to record growth in private capital deal volume in 2025, underscoring the continent’s resilience amid a challenging global investment climate, according to a new report by the African Private Capital Association (AVCA).
The 2025 Private Capital Activity in Africa report shows that deal activity rose by 8 per cent year-on-year to 530 transactions, even as global deal volumes declined by 7 per cent.
Total investment reached $5.1 billion, reflecting a slight dip in value but sustained investor appetite across the continent.
The report highlights a shift in strategy among fund managers, who increasingly focused on smaller mid-market deals as global financial conditions tightened.
Transactions valued between $50 million and $99 million doubled during the year, signalling a move away from larger, capital-intensive investments.
Private debt emerged as a fast-growing asset class, with deal volumes surging by 57 per cent year-on-year.
The growth was driven largely by the rising use of venture debt, positioning private debt alongside private equity and venture capital as a key financing channel in Africa.
Sectoral activity remained dominated by financial services, particularly fintech, which accounted for 82 per cent of transactions within the sector.
The information sector ranked as the second most active, supporting investments across finance, healthcare, retail and logistics.
Regionally, Southern Africa maintained its position as the most active investment hub, while East and North Africa recorded strong performances, buoyed by growth in energy and information technology investments.
Africa’s exit market also showed significant improvement, with 81 exits recorded in 2025, representing a 27 per cent increase from the previous year and the second-highest level on record.
This contrasted sharply with a 15 per cent decline in global exit activity over the same period.
Trade buyers remained the dominant exit route, accounting for 38 per cent of transactions, while sponsor-to-sponsor deals reached a record 26 per cent, reflecting increased depth in the secondary market.
Initial public offerings (IPOs) also saw modest growth, with four listings completed during the year.
Domestic investors played a critical role in driving liquidity, accounting for 68 per cent of private capital acquisitions.
International investors made up the remaining 32 per cent, led by Asian strategic buyers seeking to expand their footprint in African markets.
Despite the strong deal and exit performance, fundraising declined by 34 per cent year-on-year to $2.7 billion, mirroring global liquidity pressures.
Development finance institutions remained central to the ecosystem, contributing 64 per cent of total commitments.
However, domestic capital continued to deepen, with African institutional investors accounting for 21 per cent of commitments.
Sovereign wealth funds and pension funds led this trend, reflecting a growing shift towards locally sourced capital.
Commenting on the findings, AVCA Chief Executive Officer, Abi Mustapha-Maduakor, said the data reflects a continent increasingly decoupling from global investment headwinds.
“This year’s report tells a clear story: Africa is decoupling from the global slowdown. Stronger exit performance, deeper participation from domestic institutional capital, and sustained commitments from development finance institutions all point to a maturing ecosystem,” she said.
She added that the momentum is expected to build further as investors increase exposure to sectors driving Africa’s next phase of economic transformation.
