Sub-Saharan Africa (SSA) has firmly established itself as a promising region for future investments, with South Africa and Nigeria emerging as the leading destinations. The Doing Deals in Sub-Saharan Africa 2024 report by KPMG highlights the region’s resilience and attractiveness for investors, despite challenges such as political instability, infrastructure deficits, and macroeconomic hurdles.
The report reveals a steady increase in foreign direct investment (FDI) in the region, with FDI expected to reach 2.13% of SSA’s gross domestic product (GDP) in 2024, up from 1.74% in 2023, according to the International Monetary Fund (IMF).
East Africa, in particular, showed impressive investment performance, with 26% of respondents who recently closed deals in the region expressing heightened interest in future SSA investments. West Africa followed closely at 22%, and Southern Africa at 17%.
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Looking ahead, South Africa and Nigeria are the most favored destinations for investors, garnering 28% and 26% of investment interest, respectively. Both nations stand out as economic powerhouses within the region, driven by strategic assets, growth capital, and attractive valuations.
Kenya ranks third with 14% of investors citing it as a preferred destination, while no other country received more than 10% of mentions.
The mining sector emerged as a significant driver of investment in SSA, accounting for three of the top ten transactions in 2023. Key deals included MMG’s acquisition of Khoemacau Copper Mining, contributing to a 140% year-on-year surge in mining deal values, which totaled $5 billion.
The energy sector also saw notable activity, with a 10% increase in deal volume year-on-year. Energy, mining, and technology are poised to dominate future deals, with 71% of investors favoring mining and 51% pointing to oil and gas as the most promising sectors for mergers and acquisitions over the next two years.
Despite historical challenges, SSA continues to attract global investor interest due to its rich natural resources, strategic physical assets, and favorable valuations. The region’s evolving economic landscape signals opportunities for growth and development, with South Africa and Nigeria leading the way.
As investment flows increase and sectors like mining and energy continue to thrive, SSA solidifies its position as a key player in the global investment arena.