Private equity investments in Africa fell to its lowest level in at least four years in the first quarter of 2025, as global investors grappled with the uncertainty of Donald Trump’s return to the White House and lingering macroeconomic headwinds.
Data from DealMakers Africa, a South African-based firm that tracks mergers and acquisitions (M&A) and corporate finance activity across the continent, showed 75 deals worth $2.16 billion were recorded between January and March.
That represents a 41% drop in value from the same period in 2024, when 125 deals totaling $3.67 billion were announced, and a 78% decline compared with Q1 2020, when 202 deals worth $9.81 billion were reported.
“The return of Donald Trump to the US presidency early in the quarter introduced uncertainty and recalibration in US-Africa investment dynamics,” said Marylou Greig, Editor at DealMakers Africa.
Greig added that in the remaining quarters of 2025, M&A is likely to be influenced by whether the US clearly defines its Africa policy. “Until such time, activity will likely remain subdued and inconsistent.”
Analysts note that Trump’s first presidency was marked by a reduced emphasis on Africa compared with his predecessors. His return has sparked questions over US policy priorities at a time when the continent is already navigating weak currencies, high inflation, and fragile capital flows.
Regional trends
Despite the overall downturn, East and North Africa accounted for more than half of all transactions in the quarter, underlining their position as investment hubs. Kenya remained East Africa’s anchor, with 12 deals largely in financial services, healthcare, and agritech.
Tanzania and Uganda drew increased interest in infrastructure, manufacturing, and logistics, while the region’s energy transition also boosted deal activity in solar, wind, and hydro projects.
In North Africa, Egypt was the standout performer, registering 14 deals. Morocco and Tunisia followed with four and three transactions respectively, with financial services, logistics, consumer goods, and fintech drawing the most attention from investors.
West Africa’s activity was dominated by Nigeria, which accounted for nearly two-thirds of the region’s deals, supported by its large market and dynamic startup ecosystem.
Fintech leads the way
Fintech once again led investment activity, making up half of total private equity and venture capital inflows in Q1. The sector’s growth is being propelled by Africa’s mobile-first economy and innovative business models that bypass traditional financial infrastructure.
Notable among the quarter’s top transactions was a $53 million raise by LemFi, underscoring the continued appeal of digital financial services.
However, unlike previous quarters, the biggest deals were spread across a wider range of industries, from mining and heavy industrials to agriculture and fundraising platforms. This reflects the continent’s increasingly diverse investment landscape, even in a period of overall slowdown.
Outlook
Looking ahead, DealMakers Africa expects dealmaking to remain subdued until US policy toward Africa becomes clearer. However, areas such as energy independence, critical minerals, and digital infrastructure are likely to continue attracting interest, particularly from investors outside the US, including Europe, the Middle East, and Asia.
“Despite political headwinds and potential trade frictions, Africa remains one of the world’s fastest-growing markets with favorable demographics, rapid urbanisation, and a strong pipeline of entrepreneurial innovation,” Greig noted. “There is still significant dry powder waiting to be deployed into sectors resilient to macroeconomic volatility.”
