Inside The Growing Influence Of DFIs In African Private Equity

Private equity in Africa has become less of a high-risk experiment and more of a necessity. In many African markets, traditional financing options, such as bank loans, stock markets, and sovereign debt, are constrained by shallow liquidity, high interest rates, or policy volatility. That leaves private equity as one of the few credible channels for long-term capital formation, especially in underserved sectors like infrastructure, agribusiness, logistics, and healthcare.

But private equity doesn’t thrive in a vacuum. The environment remains difficult: currency volatility, political risk, shallow exit markets, and patchy regulation continue to repel many commercial investors. What’s holding it all together is the steady, deliberate presence of Development Finance Institutions (DFIs).

In 2024, private capital fund managers operating in Africa raised USD 4.4 B in final closes, more than double the capital raised in 2023 and the third-highest annual total in the past decade, according to the African Private Capital Activity Report to AVCA. But strip away DFI involvement, and that story changes. Roughly 42% of that USD 4.4 B came from DFIs, the highest share of any LP group.

These publicly funded institutions aren’t just providing anchor capital, they’re stabilising an entire asset class.

Private Equity Grows While the World Pulls Back

Africa’s fundraising boom in 2024 is striking when viewed in the global context. According to Bain & Company, global private equity fundraising declined by nearly 19% in 2023 as rising interest rates, geopolitical tensions, and exit delays stalled activity across Europe, the U.S., and Asia. In contrast, Africa’s fundraising moved in the opposite direction, seeing growth. That divergence underscores a silent DFI presence absorbing more risk at a time when most pulled back.