Evolving GP-LP Dynamics
August 29, 2025The State of Private Market in Nigeria and Africa
if you looked keenly at Africa, and Nigeria in particular, as a private market investor, the story is both challenging and exciting. On one hand, you’ve got currency depreciation, inflation, and global economic jitters weighing on sentiment. On the other, you’ve got a continent that’s young, urbanizing fast, digitizing even faster, and full of sectors that are not just surviving, but thriving.
Even with deal values dipping globally, African private markets are showing real resilience. In 2023, Africa saw over $6 billion in private capital deals, and while big-ticket transactions slowed, deal volumes held steady. That tells you something important: capital is still finding its way to the right stories.
African Private Markets Showed Resilience in 2023 with $6B+ IN PRIVATE CAPITAL DEALS Deal volumes held steady despite global slowdown in big-ticket transactions
Let’s start with the obvious one. Africa is still a tech and fintech story. Despite a slowdown from the 2021–22 highs, fintech continues to dominate funding rounds. Nigeria,,often called the “Silicon Lagoon”, is leading the charge. Payments, digital banking, lending platforms, e-commerce, logistics tech, and even health-tech are pulling in capital because they solve everyday inefficiencies. With over 60% of Nigerians still underbanked, the upside here remains huge.
Infrastructure & Energy Transition
Africa’s infrastructure gap is no secret. The World Bank estimates the continent needs $130–170 billion annually to close it, and that’s attracting long-term money. Ports, roads, data centers, you name it, the need is massive. On top of that, the energy transition is a big play. Solar farms, green hydrogen, and critical minerals like cobalt and lithium are becoming investor magnets, especially as global players look for supply diversification. Many of these projects are blending donor funding with private capital to de-risk large-scale commitments.
Consumer & Agribusiness
Africa’s demographic story is unmatched: over 1.4 billion people, half under 20. That means rising demand for consumer goods, retail, and food security solutions. Nigeria, with its 220+ million people, is a textbook case, investors are backing local manufacturers to modernize and scale, while agribusiness is pulling in patient capital across storage, processing, and AgriTech. With Nigeria spending billions annually on food imports, the incentives for local solutions couldn’t be clearer.
How Investors Are Playing It
Gone are the days of “buy-and-hold and hope.” Today’s strategies are about active engagement and risk management.
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Value Creation First: Investors are rolling up their sleeves, streamlining operations, strengthening governance, and helping portfolio companies digitize. It’s less about riding market multiples and more about building real efficiencies.
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Risk Mitigation: Currency swings remain a headache. That’s why strategies now lean on hedging, focusing on businesses with strong local revenue or those earning FX through exports.
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Exit Pathways: IPOs aren’t the easy answer here. Instead, trade sales to corporates and secondary deals between PE funds are becoming the go-to exit routes. Holding periods are also stretching a bit longer, but that’s part of the game in less liquid markets.
What’s the Mood?
Despite the headwinds, confidence is holding up surprisingly well. Recent years have seen African-focused funds still closing strongly, especially in infrastructure and private equity. LPs clearly believe in the continent’s long-term growth story.
