Africa has become a global intersection point for capital, strategy and geopolitics over the past year, fuelled by interest from several major economies – but there is a lot of work to be done if the continent is to capitalise on this momentum, writes Simon Turner, Managing Director – Head of Africa at Hawksford…
The headline for Africa is extremely positive: over the next 12 months, Sub-Saharan Africa is forecast to become the fastest growing region globally. The latest data, for instance, points to African private equity outperforming both the MSCI Emerging Markets Index and the S&P 500.
This is being driven by a number of factors.
At a global level, ageing societies, shrinking labour forces and slow or declining gross domestic product growth have all hampered expansion in advanced economies, prompting managers and investors to seek opportunities elsewhere.
In addition, African nations have taken steps to evolve in the face of geopolitical change, making diplomatic efforts and adopting economic strategies to bolster self-sufficiency – from conversations in Washington aimed at mitigating US tariffs to seeking new partnerships with Middle East and Asian countries.
Collaborative agreements, like the formation of the African Continental Free Trade Area (AfCFTA), are also reinforcing that burgeoning picture, aiming to reduce intra-African tariffs, streamline regulations, and create economies of scale to attract global investment by positioning the region as a unified market.
Overall, it’s a positive picture offering enormous potential. But, as always, there are a number of hurdles still to be tackled if this trajectory is to be maintained and the potential is to be achieved.
So where are we likely to see movement as Africa seeks to realise its ambitions in 2026?
Global partnerships
There’s no doubt that the world has rediscovered Africa, with the continent becoming a global intersection point for capital, strategy and geopolitics. As a result, Africa is undergoing a period of significant diversification in terms of its international partnerships.
The continent now engages with a wide range of global players, including China, the US, the EU, the Gulf Cooperation Council (GCC), Japan, Turkey, India, Southeast Asia, and Brazil. While trade relationships are primarily oriented toward China, financial and aid-related engagements remain more closely linked to the US and the EU.
At the same time, China’s role is evolving away from large-scale infrastructure lending toward greater export activity, manifested through the widespread presence of Chinese goods in African markets. Further complementing these shifts, middle powers – especially GCC Member States – are significantly expanding their footprint, with the UAE now Africa’s fourth-largest investor.
From a sector perspective, under-development in multiple segments of the market is fuelling the investment opportunity on offer, while the rise of Africa’s digital economy is fostering a sense of optimism for investors.
The prospects for investors to truly make an impact when looking through an ESG lens continues to be compelling, with the double bottom line of investing into the continent for financial performance as well as the opportunity to make a positive impact.
How these global partnerships evolve in a complex macro environment will be pivotal to Africa’s success.
Market challenges
While the African continent has made positive headway in embedding itself into the global economy, market barriers remain.
A total of 20 Sub-Saharan countries are currently considered to be in debt distress and investment rates continue to lag behind comparable Asian economies unencumbered by the same infrastructure limitations.
Domestic debt issuance in Africa has risen sharply, increasing from approximately US$150 billion in 2014 to around US$500 billion in 2024 – a trend that has heightened concerns about the potential crowding out of private sector investment.
Raising capital for African-focussed investments has also remained a significant challenge. In 2025, total capital raised declined by 22%, while the average time to close a fund stretched to 2.3 years.
Capital concentration has also intensified, with 85% of commitments flowing to just three large funds in 2025, leaving little room for smaller players. As a result, first-time general partners have been particularly affected, accounting for only 6% of total commitments.
Furthermore, at the last count, 51% of African deals were undisclosed – the highest level on record – highlighting a growing transparency gap in the market. In an environment where investor confidence depends on trust, strong governance and clear information, this rising opacity is increasingly becoming a significant commercial risk.
The result of all of this is that strengthening and sustaining investor trust is likely to remain a central challenge for Africa if it is to be able to meet the expectations of global investors and secure capital commitments.
Service quality and the Mauritius dynamic
Mauritius has long played a role in instilling the requisite confidence to invest in the continent, and in the year ahead, it will likely play an increasingly central role as a structuring engine for Africa-bound private equity, venture capital, infrastructure and debt.
However, expectations around the service quality of providers in the jurisdiction have risen sharply and this is likely to play a critical role in how the Mauritius-Africa dynamic evolves.
Across all asset classes, managers have consistently emphasised the importance of the quality of administration, staff turnover, consistency, and governance standards when it comes to assessing their partners in Mauritius. Continuity, institutional strength and the ability to operate effectively across multiple jurisdictions are all now key drivers of decision-making.
Consequently, service providers adept at providing seamless Africa-Mauritius connectivity combined with high governance standards and deep fund administrative expertise are likely to find themselves in demand.
As an established specialist in Africa and Mauritius structuring, Hawksford is strongly positioned in this respect, offering an end-to-end service tailored to the needs of managers, promoters, directors and investors.
The team in Mauritius has access to a ready-made network of sector experts through our strategically located offices across Europe, Asia-Pacific, Africa and the Americas, as well as connections with international corporations, financial institutions, investment managers and high net worth individuals.
At a time when the demand for trusted, high-quality services has never been higher, this sort of institutional-grade support will be invaluable as investors look to tap into the vast and diverse opportunities in Africa – and as Africa looks to realise its considerable growth potential.
Contact our experts
Get in touch with our Funds team to find out how we can support you with your fund administration and governance needs.
