Fifteen African firms collectively raised nearly $2 billion last year, says PwC

23 April 2018

As Africa’s economy becomes an increasingly integral part of the global business world, a handful of businesses from the region are beginning to receive recognition for their rapid expansion. According to a new report published by PwC in conjunction with the London Stock Exchange Group (LSEG), nearly $2 billion was raised in financing last year by just 15 firms.

Markets across Africa, while varying in several ways, have been displaying similar economic trends in recent years, most of which are highly promising. Most African countries, for instance, have a very low median age, which cumulatively makes the continent the youngest region in the world, and entails the imminence of a large population in the productive age-bracket. 

Digitalisation is another highly promising indicator common to several economies, with the continent collectively set to surpass 1 billion internet connections by 2022. In contrast with the global scenario, the banking sector has also registered good performance across most African markets in recent years.

Much like other developing economies, however, growth in these markets is being driven by a handful of firms that are generating substantial revenues and are on strong growth trajectories. In a new report titled ‘Companies to Inspire Africa,’ Big Four professional services firm PwC has tracked the growth of some of the continent’s largest companies, providing context for the markets in which they operate.

Financing raised by top African companies

The report surveyed over 340 of the biggest companies across the continent, with a majority coming from Western (124) and Eastern (103) Africa. Northern and Southern Africa collectively account for 150 of the firms surveyed, while Central Africa is home to the least — at 18 companies. 75 of these companies, as per the report, saw growth of some kind over the last year. 

In terms of growth trajectories, the report categorises growth over the last year into four indicators. The amount of funding raised features on the list, alongside product or geographical capacity expansion, the completion of an M&A deal, and entry into a joint venture.

In terms of financing, 15 companies collectively raised $1.9 billion last year. Most of this funding was sourced through bilateral bank financing, followed by IPOs, with private equity fundraising coming in as the third biggest source. IPO issues took place on the Johannesburg Stock Exchange (JSE), as well as on the exchanges of Tunisia and Rwanda.

Organic expansion of top African companies

The financial services sector was the most active in IPO fundraising with five issues in total. The energy sector, which is undergoing a period of transformation in many African countries, was also fairly active, raising funds through four IPOs. Notable firms which raised funds include Viathan Engineering of Nigeria, Helios Towers Africa, and Brainworks Capital Management.

The highest number of companies, at 28, registered growth in terms of expansion in either their geographical reach, their product offering, or their capacity of production, in that order. Nigeria, South Africa, and Kenya, which are the largest economies on the continent, boasted the greatest number of expanding companies, at 8, 5, and 5 respectively.

In terms of sector-specific expansion stories, the financial services sector was the most active yet again with 8 companies, followed by the consumer services sector at 7 companies. Notable firms that saw this nature of growth include South African firm AllLife Group, Ethiopian firm Dashen Breweries, and Fan Milk of Ghana.

Inorganic expansion of top African companies

16 of the companies, meanwhile, saw inorganic growth through M&A deals valued at $30 million or higher, despite the fact that the M&A market on the continent hit a five-year low last year. The financial services, healthcare & pharmaceutical, industrial products, and the technology & telecoms sectors were all tied at the top of this segment, at three deals each. 

Firms of note in this segment include Craft Silicon of Kenya, which acquired a minority stake in EatOut; Horizon Equity partners, which acquired South African firm Dynamic Fibre; and Hygeia Nigeria, which acquired Gold Cross Hospital. 21 companies, meanwhile, saw growth through joint ventures and alliances, with industrial products emerging as the top sector (7 agreements).

Commenting on the findings of the report, CEO of PwC Africa Hein Boegman said, “By showcasing resilience and adaptability in spite of challenging environments, the story of the potential that lies within many African economies and companies demonstrates the strong fundamentals that continue to exist in the continent.”


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Nigeria is home to the most companies that are driving Africa's economic prominence

08 April 2019

As many as 360 companies across Africa have achieved unprecedented growth over the last year, to the extent that global professionals services firm PwC has placed them in its latest edition of the Companies to Inspire Africa 2019, developed in collaboration with the London Stock Exchange. 

Experts have long talked of the economic potential that the African continent holds to become a major financial centre in the global economy, particularly as conditions for business in the region continue to improve gradually. Parts of the continent are now in a position to keep pace with global trends.

To lay the foundation, a number of countries have now come under stable democratic regimes, which has offered the stability required for economic activity to thrive. Economic indicators, on the other hand, have always been in favour of business on the continent, given its vast young population.Sector-wise growth in Africa

As per PwC’s report, Africa is home to nearly 230 million between the ages of 15 and 24, which means that the continent will have a substantial workforce in the near future, provided that this population can be educated and endowed with the requisite skills for development.

In addition, a number of African countries have the benefit of developing their technological, political and regulatory infrastructure at a time when these environments are transforming across the globe, allowing these developments to learn from international trends and best practices.

These conditions are gradually beginning to manifest themselves in the form of economic prosperity, which is leading to the increase in the number of urban centres across the continent, an expanding middle class, and consequently the rapid expansion of the continent’s consumer retail market.Sector-wise growth in Africa (2)

360 companies detailed in the collaborative report between PwC and the London Stock Exchange are operational in a range of different sectors, including the retail sector, as well as a rapidly expanding agricultural sector, which is only expected to growth further in the near future.

Technology is another area of focus for firms across the continent, as they look to capitalise on the market of online users on the continent, which is expected to surpass 1 billion people by as early as 2021. Another benefit that African economies are drawing from their development in the current scenario is energy efficiency.

Sustainable technology is at its peak around the globe as firms around the globe are subject to increasingly stringent environmental regulations. As a result, renewable energy companies in the region have been thriving over the last year. Financial services is another segment that has registered a strong performance.African companies snapshotOverall, the 360 companies hailed from 32 countries across the continent and registered a staggering compound annual growth rate in revenue of 46%. The majority of these companies – 147 – hailed from East Africa, where foreign investment has been rapidly on the rise. 

Western Africa, which is home to the budding economies of Nigeria and Ghana, has the second largest number of companies at 130. In terms of individual countries, Nigeria was home to the most companies at 97, leading the other countries by some distance. South Africa was next with 23 companies.