Africa’s private equity market is expected to remain resilient in 2026 despite escalating tensions in the Middle East, which have pushed up global oil prices and threaten to reverse recent inflation gains across the continent, according to a new report by DealMakers Africa.
The outlook follows a year in which aggregate deal value across Africa (excluding South Africa) rose by 18 percent to $17.3 billion in 2025 up from $14.7 billion in 2024, supported by a handful of large transactions. However, overall activity remained subdued, with last year recording the lowest deal volume in three years amid global uncertainty tied to shifting US trade and foreign policy.
Geopolitical tensions involving the United States, Israel and Iran have intensified since late February 28, driving crude oil prices to above $100 per barrel and disrupting tanker traffic through the Strait of Hormuz — a critical route for roughly a fifth of global oil supply.
For many African economies reliant on imported refined fuel, the impact has been immediate. Rising pump prices are feeding into transport, food and production costs, threatening to stoke inflation and erode consumer purchasing power.
“While such uncertainty often prompts investors to pause, African M&A activity is expected to remain relatively resilient this year,” said Marylou Greig, editor at DealMakers Africa. “The continent is increasingly viewed as a strategically neutral source of critical minerals and energy exports essential to global supply chains.”
She cautioned, however, that key risks persist. Rising inflation could push interest rates higher, increasing the cost of financing transactions, while currency volatility in major African economies may complicate deal structuring and valuations.
Greig added that the outlook presents a dual narrative for investors: heightened risks in manufacturing and export sectors amid evolving trade dynamics, but renewed opportunities in critical minerals, energy and infrastructure.
“Despite these complexities, market sentiment suggests that 2026 could remain a robust year for African dealmaking, supported by structural reforms in key markets such as South Africa and Nigeria, as well as the gradual implementation of the African Continental Free Trade Area,” she said.
Regional split: Volume vs value
Regionally, West Africa — led by Nigeria — remained the most active market, recording 110 deals, nearly a third of total transactions. Africa’s most populous nation alone accounted for 60 deals. East Africa followed with 87 deals, driven largely by Kenya’s 58 transactions, while North Africa recorded 81 deals, with Egypt contributing 51.
In value terms, however, Kenya overtook Nigeria, attracting $5.83 billion compared with Nigeria’s $2.39 billion, underscoring the growing importance of large-ticket deals in shaping capital flows.
Activity in general corporate finance — including equity issues, placements and listings — remained broadly stable at 123 transactions in 2025, compared with 127 in the previous year. However, total value dropped sharply to $7.15 billion from $16.5 billion in 2024.
The year’s largest deal was Diageo’s disposal of its stake in East African Breweries to Japan’s Asahi Group, followed by Vodacom’s $2.4 billion acquisition of an additional 20 percent stake in Safaricom.
Regulatory shift reshapes dealmaking
Looking ahead, dealmakers are increasingly optimistic about a rebound in activity.
“The sub-Saharan Africa M&A landscape appears to be gearing up for a level of momentum not seen in several cycles,” said Krishna Nagar, head of corporate finance at RMB, an African cooperate and investment firm.
He noted that improving macroeconomic conditions and resilient equity markets in key hubs such as Johannesburg, Nairobi and Lagos are setting the stage for stronger execution this year.
RMB also highlighted a shift in the regulatory environment across the region, with increased scrutiny on competition, environmental impact and local economic benefits. “Deal success will increasingly depend not just on competitive dynamics, but on contributions to sustainability and local economies,” the bank said.
Governments are also refining local content requirements, moving beyond simple ownership thresholds toward models that prioritise value retention, supplier integration and skills transfer.
“This requires acquirers to embed local partnerships and technical capacity-building into their strategies,” RMB noted, adding that regulatory engagement is becoming a core element of deal execution across Africa.
Bunmi holds a degree in Economics from the University of Lagos and has over eight years of experience in content writing and journalism.
Her career spans roles as a financial and business journalist at BusinessDay Media and TechCabal, and as Head of Research at SBM Intelligence, an Africa-focused market intelligence and strategic consulting firm.
She also served as Editor at Finance in Africa, a subsidiary of Businessfront and is currently Assistant Editor, Finance (Africa), at BusinessDay.
