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Kenya, Egypt, and Nigeria dominate Africa's investment hotspots list in 2023 - Report

Africa's investment landscape is charting a compelling narrative of growth and expansion, with a quartet of markets—Kenya, Egypt, Nigeria, and South Africa—emerging as the top investment destinations for funding, according to a new report.

The Africa Investment Report 2023 revealed that Kenya, Egypt, Nigeria, and South Africa collectively account for a dominant 68% share of the continent's total investment influx in 2023.
  • Kenya, Egypt, Nigeria, and South Africa collectively account for a dominant 68% share of the continent's total investment influx in 2023.
  • Kenya received the highest funding in 2023 - $806 million, followed by Egypt with $675 million, Nigeria at $575 million, and South Africa closely behind at $565 million.
  • According to the report, these countries have continued to solidify their positions as the 'Big Four' destinations for funding in Africa.
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The report titled: “The Africa Investment Report 2023” revealed that Kenya, Egypt, Nigeria, and South Africa collectively account for a dominant 68% share of the continent's total investment influx in 2023.

This concentrated growth reflects these nations' attractiveness for investors and their increasing role as regional epicentres for international companies looking to expand across the continent.

The report lays out a detailed geographical analysis of the investment influx, with Kenya leading at $806 million, followed by Egypt with $675 million, Nigeria at $575 million, and South Africa closely behind at $565 million. According to the report, these countries have continued to solidify their positions as the 'Big Four' destinations for funding in the African economic landscape.

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Further insights into the report showed that emerging markets are also displaying vigour, with countries like Tunisia, Rwanda, and Ghana quickly becoming hotspots for funding. Tunisia, for instance, garnered over $460 million in funding, while Rwanda has impressed with $350 million, reflecting a diversifying landscape that is attracting investors to new geographies and opportunities.

Another interesting insight from the report revealed that Fintech remains the biggest sector, reeling in substantial investments and accounting for 23% of total deals in 2023. The report also spotlighted other burgeoning sectors such as health, education, and agriculture, each with at least a 10% slice of the investment pie.

Commenting on the report, Yann Azandege, Investment Analyst at Digital Africa said, “African startups are focusing more on B2B business models either as SaaS or commission-based models. Apart from fintechs, we think agritechs and greentechs would gain more ground in Africa as startups are able to design competitive or asset-light business models. In addition, edtechs offering upskilling and vocational retraining products, as well as startups within the creative industry, might gain more traction from investors.”

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In terms of deal volume, Nigeria recorded over 250 deals in 2023, demonstrating quantity and a breadth of opportunities that span various industries. Kenya recorded over 160 deals, and South Africa and Ghana, each with 130 and 65 deals respectively, echo this sentiment, showcasing an environment teeming with entrepreneurial activity and investor interest.

While the 'Big Four' continue to command a significant share of funding, the rise of emerging ecosystems hints at a future of balanced growth. According to the report, Markets like Mauritius, Tanzania and Uganda are also carving their own niches in the investment domain.

The Africa Investment Report 2023, published by Briter Bridges, provides a comprehensive overview of the African investment landscape. With the continent's strategic sectors receiving an infusion of capital, the stage is set for a new chapter in Africa's economic ascent, fueled by innovation, regional integration, and strategic partnerships.

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