Investors Sentiment & Outlook

The AVCA Investors Sentiment & Outlook report offers forward-looking insights into how Limited Partners (LPs) and General Partners (GPs) view the African private capital landscape for 2026, revealing a measured optimism tempered by global and regional challenges.

This edition highlights cautious optimism among private capital investors operating in Africa. While more than half of LPs and GPs remain optimistic about investment activity in 2025, expectations around exits remain subdued, reflecting a market environment characterised by continued deployment opportunities but constrained liquidity.

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Report Overview

Macroeconomic pressures remain a central theme shaping global investor sentiment. Currency volatility continues to rank as the most significant concern for both LPs and GPs, alongside geopolitical uncertainty and shifting global policy dynamics that may affect development finance flows and capital availability. These factors have contributed to ongoing caution around liquidity and exits, reinforcing a more selective investment environment across African private capital markets.

Despite these challenges, investor commitment to Africa remains resilient and performance indicators show signs of improvement. More than 90% of LPs expect to maintain or increase their allocations to the continent over the next three years, supported by growing interest from Middle Eastern and Asian investors as well as increasing participation from African institutional capital.

LPs' Sentiment & Outlook

• 56% of LPs expressed optimism about investment activity in Africa for 2025, while only 20% were optimistic about exits, signalling cautious optimism across the market
• Currency volatility (76%) and rapidly evolving geopolitical uncertainty (72%) rank as LPs’ top macroeconomic concerns impacting African investments
• Over 90% of LPs plan to maintain or accelerate their capital allocation to Africa over the next three years, reinforcing long-term commitment to the region
• Private Equity and Venture Capital remain dominant in LP allocation plans (56% combined), although Infrastructure and Private Debt are gaining momentum
• Co-investment emerges as LPs’ leading investment opportunity (70%), while Financials (60%) is viewed as the most attractive sector
• Nigeria ranks as LPs’ most attractive investment market (76%), although Kenya leads among Africa-based LPs
• 62% of Africa-based LPs believe Africa is more attractive than other emerging markets, compared to 40% of international LPs

GPs' Sentiment & Outlook

• 59% of GPs expressed optimism about investment activity in Africa in 2025, with fundraising identified as their top strategic priority (71%)
• Exchange rate volatility (84%) and geopolitical uncertainty linked to US policy shifts (59%) represent the most significant macroeconomic concerns for GPs
• Energy (50%), Consumer Goods (49%) and Healthcare (45%) emerge as the leading sectors for investment focus among GPs
• Kenya and South Africa are identified as the most attractive investment destinations, both cited by over 65% of GPs
• 84% of GPs plan to incorporate AI tools at the organisational level, with 64% intending to deploy AI across portfolio companies
• 52% of GPs believe Private Debt will overtake Private Equity as the most profitable strategy in Africa over the next three years
• 54% of GPs expect Africa to become more attractive than other emerging markets over the next five years

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