The above fundraising represents the supply of capital available from private equity funds for investment. The extent to which an equal supply of investable opportunities exists cannot be observed directly. However, the level of deal activity and the prices at which investors make such investments can be measured.

Total private equity transaction activity steadily increased by 20% from June 2018 to June 2019. It tapered slightly to a 9% increase from June 2019 to June 2020, defying the collapse in fundraising. Transaction activity then rebounded strongly by June 2021, resulting in a 19% increase from June 2020 to June 2021. As illustrated in the dry powder discussion, fund managers continue to deploy the significant supply of capital created in the market during earlier fundraising years. A key observation, however, is that while the quantum of transactions occurring is increasing, the value per transaction is not. The average transaction value in our database between 2016 and 2019 was USD40.44m, whereas between 2020 and 2021 it shrunk to USD11.1m.

Key drivers underpinning the investment case in Africa include a youthful population boosting productivity, rapid urbanisation, and accelerated technology uptake. These factors continue to support long-term growth in activity.