The energy and mining sectors, particularly oil and gas and solid minerals in Sub-Saharan Africa, were hotspots for investment deals in 2023.
The increase in the number of successful deals in the region have been traced to Africa’s rapid urbanization and expanding middle class.
The African Development Bank forecasts that the continent’s middle-class population will skyrocket from 123 million to 1.1 billion by 2060.
These are also driving growth and development in Africa’s cities as well as creating vast opportunities for sustainable and inclusive industrialization.
Investment growth in SSA
Sub-Saharan Africa is experiencing a surge in growth and interest, buoyed 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.
Looking ahead, KPMG projects that this momentum will continue, with growth expected to reach 4% in 2025.
“Inflation across the region is expected to halve from a peak of 10% in late 2022. Public debt ratios are stabilizing and SSA economies have returned to issuing debt on the international capital market after a two-year hiatus.” the international advisory firm noted.
According to the Doing Deals in Sub-Saharan Africa 2024 report published by KPMG, the top 10 deals in Sub-Saharan Africa for 2023 had a combined total of approximately $7 billion, with the mining sector being a significant contributor.
Sub-Saharan Africa’s (SSA) top deals in 2023 were dominated by the mining sector, with three of the top four transactions involving targets in Botswana, South Africa, and Zimbabwe
The table below presents the top 10 deals struck in Sub-Saharan Africa last year;
| Rank | Target | Acquirer | Date | Sector | Deal Value (US$m) |
|---|---|---|---|---|---|
|
1 |
Khoemacau Copper Mining (Pty) Ltd |
MMG Ltd |
Q4 – 2023 |
Mining |
2,083 |
|
2 |
Engen Limited |
Vivo Energy Ltd; Vitol Netherlands Coöperatief UA |
Q1 – 2023 |
Oil & Gas |
2,000 |
|
3 |
Vedanta Limited (Zinc International assets) |
Hindustan Zinc Ltd |
Q1 – 2023 |
Mining |
1,046 |
|
4 |
Williams Minerals (Pvt) Ltd |
China Natural Resources Inc |
Q1 – 2023 |
Mining |
1,003 |
|
5 |
BioTherm Energy (Pty) Ltd |
ENGIE SA; Meridiam SAS |
Q2 – 2023 |
Renewables |
1,000 |
|
6 |
Oil & Gas Assets (Upstream assets in Angola) |
Etu Energias SA |
Q1 – 2023 |
Oil & Gas |
830 |
|
7 |
Assala Energy Holdings Ltd |
Gabon Oil Company |
Q4 – 2023 |
Oil & Gas |
730 |
|
8 |
MiX Telematics Ltd |
PowerFleet Inc |
Q4 – 2023 |
TMT |
728 |
|
9 |
Mopani Copper Mines plc |
International Resources Holding RSC Ltd; Delta Mining Ltd |
Q4 – 2023 |
Mining |
620 |
|
10 |
Peermont Global Ltd |
Sun International Ltd |
Q4 – 2023 |
Leisure |
614 |
The mining sector saw a remarkable 140% year-on-year increase in deal value, reaching $5 billion, with MMG’s acquisition of Khoemacau Copper Mining being a standout deal.
The energy sector also witnessed significant activity, with a 10% year-on-year increase in deal volume and three of SSA’s top 10 deals taking place within the sector.
The largest deal of the year in the energy sector saw French companies Engie and Meridiam acquire South African renewable energy developer BioTherm Energy for US$1 billion.
The second largest deal in the sector was also the region’s largest domestic deal, with Angola’s Etu Energias, formerly Somoil, acquiring Galp Energia for US$830 million.
The deals highlight the growing investor interest in Sub-Saharan Africa, driven by the region’s favourable demographics, abundant natural resources, and growing communication and technology adoption
