Kenya's Capital Nairobi. Kenya is closing in on South Africa and Nigeria as Sub Saharan Africa's top Private Equity Investment destination

Kenya is closing in on South Africa and Nigeria as Sub Saharan Africa’s (SSA) top Private Equity Investment (PEIs) destination, a report by the World Bank has revealed.

Between 2008 and 2010, South Africa took the lion’s share of Sub Saharan Africa’s foreign PEIs at 57% beating Nigeria 15%, Kenya 8% while the other countries in SSA shared 20% of the rest of the spoils.

However Kenya’s regulatory stability, private sector led economy, sophistication of business environment, strong entrepreneurial class and a good supply of human capital are factors that have led to the reduction in South Africa’s dominance of SSA in terms of PEIs.

Nairobi’s quality of life, solid foundation of human capital, efficient transportation links, and a strong community of service providers such as accountants, lawyers, and consultants are also attractive propositions to investors.

Consequently, between 2013 and 2015, South Africa’s PEIs plunged by half to 28%, while Nigeria adjusted up 3% to 19%.

During the period under review, Kenya’s PEIs doubled to 16% while the other Sub Saharan countries attracted 37% of the region’s PEIs.

“Kenya’s standing in the alternative investment industry in Africa is notable. The country now ranks third behind South Africa and Nigeria in terms of private equity transactions in SSA. PE funds invested more than Ksh75.5 billion across nearly 50 deals based in Kenya from 2013 to 2015,” reads the report.

The World Bank report dubbed Survey of the Kenyan Private Equity and Venture Capital Landscape, also states that Kenya offers clear advantages for fund managers seeking to target East Africa.

“The country’s capital, Nairobi, is viewed as the most attractive location in East Africa from which investors can establish offices and cover the region. This advantage makes the city the de facto alternative investment hub of East Africa, and places it alongside Johannesburg and Lagos as the investment capitals of SSA,” reads the report.

Kenya also serves as a launch pad for investors seeking to execute cross-border investments in companies that operate within the East African Community (EAC).

Nairobi’s relentless pursuit of trade harmonization within EAC has also boded well with the investors as favourable trade policies within East Africa affords them an opportunity to regionalise their businesses.



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