East Africa is one of the fastest growing regions in the world and represents our regional investment focus. When we meet East African business leaders, we are struck by their optimism and excitement. Their attitude is a direct reflection of the positive economic developments we have been observing for over a decade now. East Africa provides attractive direct investment opportunities at superior returns typically higher than in other frontier and emerging economies. Besides this growth there is also an enabling environment for private equity investments.
The region has shown an unprecedented period of high economic growth and is projected to show real GDP growth rate of 5-10% for the coming years. It has a population of over 250m and a combined GDP of over USD 140bn. In addition, a fast growing middle class and strong urbanisation continue to boost the consumer goods sector. The sustainability of this growth is supported by a broad industry diversification and low dependency on commodities.
Macro economic growth by itself is not sufficient for private equity investments. However, the region has a strong enabling environment for successful private equity investments such as:
Human & social environment: Improving political stability, conducive human and social environment, and long lasting peace over the last decades
Investor protection, corporate governance & taxation: Good investor protection and corporate governance, increased support to foreign direct investments by local governments
Entrepreneurial spirit & deal opportunity: Vibrant entrepreneurial culture, which translates into increased number of private equity deal opportunities in the SME space