Areas of focus

 With unused arable land (c.60% of world total), there is potential for Africa’s agricultural output to reach $500bn by 2020 and $880bn by 20301, signalling a likely expansion drive of agribusinesses in the region. About 75% of the absolute increase over the next 10 years is expected to occur in these countries: Nigeria, Ghana, Ethiopia, Kenya, and Tanzania amongst others.

The rise and rise of fintech in the African markets is evidenced in its disruptive capability of its products targeted at sectors such as financial services, hospitality, agriculture etc. Fintech attracted c.30% of total VC funding into Africa in 2015 and VC funding since then has more than doubled to over $100m in 20173. The sector continues to offer fast and high growth potential given its benefits such as innovation and financial inclusion.

It is estimated that 80% of adults in sub-Saharan Africa do not have access to semi-formal or formal financial services. This estimate implies that 320 million adults in Africa are unserved by the financial services industry4. As the drive towards financial inclusion intensifies, traditional and non-traditional financial institutions will need to strengthen their ability to capture market share.

Since the rebound in oil prices, Africa-focused E&P companies have increasingly sought funding to finance operations even as new licence rounds open up and regulatory uncertainty diminishes. In particular, M&A activities in the Nigerian downstream sector continues to remain on the horizon.

Africa’s consumer and business spend is expected to grow from $1.4tn annually to $2.1tn by 2025. In particular, manufacturing output is estimated to increase by1.86x from $500bn to $930bn, with c.75% of that potential driven by Africa-based companies5 – on the back of the continent’s expected population growth. Consequently, as demand for consumer goods continue to outstrip supply, financing requirements by manufacturers is expected to rise sharply.