Investment in Sub-Saharan Africa’s Energy and Mining Sectors Soars in 2023
The year 2023 saw a significant increase in investment deals in Sub-Saharan Africa, particularly in the energy and mining sectors. These sectors, which include oil and gas as well as solid minerals, emerged as hotspots for deal-making activity. The surge in successful deals can be attributed to Africa’s rapid urbanization and the expanding middle class, which are creating a conducive environment for investment opportunities.
According to the African Development Bank, the continent’s middle-class population is projected to grow from 123 million to 1.1 billion by 2060. This demographic shift is driving growth and development in African cities and presenting vast opportunities for sustainable and inclusive industrialization.
Sub-Saharan Africa is currently experiencing a surge in growth and interest, supported by a positive economic outlook. The International Monetary Fund (IMF) forecasts the region’s GDP to increase from 3.4% in 2023 to 3.8% in 2024, with nearly two-thirds of countries expecting higher growth. KPMG projects that this momentum will continue, with growth expected to reach 4% in 2025.
The top 10 deals in Sub-Saharan Africa for 2023, as highlighted in KPMG’s “Doing Deals in Sub-Saharan Africa 2024” report, totaled approximately $7 billion. The mining sector emerged as a significant contributor to these deals, with three of the top four transactions involving targets in Botswana, South Africa, and Zimbabwe.
The mining sector saw a remarkable 140% year-on-year increase in deal value, reaching $5 billion. MMG’s acquisition of Khoemacau Copper Mining stood out as a standout deal in this sector. The energy sector also witnessed significant activity, with a 10% year-on-year increase in deal volume. French companies Engie and Meridiam’s acquisition of South African renewable energy developer BioTherm Energy for US$1 billion was the largest deal in the energy sector.
The deals in both the energy and mining sectors highlight the growing investor interest in Sub-Saharan Africa. This interest is driven by the region’s favorable demographics, abundant natural resources, and the increasing adoption of communication and technology. Overall, Sub-Saharan Africa presents a promising landscape for investment and growth in the coming years.
