Kenya, South Africa Lead Africa in Private Capital Investments in 2024
The report highlights a 30% surge in private debt transactions across Africa, particularly in high-growth sectors such as renewable energy, infrastructure, and financial services. This trend suggests a shift towards alternative financing structures as investors seek to mitigate currency risks and regulatory uncertainties while ensuring stable returns.
Kenya and South Africa emerged as the top destinations for private capital flows in Africa in 2024, securing 83 and 84 investment deals, respectively, according to the Africa Capital in 2025 Report by Stears. The report highlights the continued dominance of these two economies in attracting private capital, fueled by strong financial sectors, infrastructure development, and renewable energy projects.
Kenya’s Investment Landscape
In Kenya, the financial services sector remained the most attractive for investors, with notable transactions involving leading financial institutions. I&M Group secured $50 million in debt financing from AfricInvest in June 2024, while NCBA Group received a similar $50 million funding package from Proparco in March. This influx of capital underscores the growing confidence in Kenya’s banking sector, which has demonstrated resilience despite global economic uncertainties.
The energy sector also witnessed significant investment activity. Mergence Investment Managers provided a $9 million debt package for Solarise Africa, and SunCulture successfully raised $27.5 million in a Series B funding round. Additionally, a $15 million debt and equity financing deal was extended to Mawingu Networks Limited—Kenya’s largest rural-focused Internet Service Provider (ISP)—by Cygnum Capital, InfraCo Africa, and the Dutch Development Bank FMO, facilitating its acquisition of Tanzanian ISP Habari Node Limited. These investments are poised to enhance energy access and digital connectivity in underserved areas, driving economic growth.
Other major deals included $27.5 million for SunCulture Kenya, $47.5 million for Two Rivers TRIFIC SEZ, $41.5 million for BasiGo’s electric mobility expansion, $20 million for Hewatele, and $12 million for Dune Packaging. Camino Agencies also secured an undisclosed investment to support its business growth.
South Africa’s Industrial Strength
South Africa remained a dominant player in private capital investments, with the industrial sector attracting the highest number of deals (18), followed by financial services (12), energy (11), and technology (10). The country’s ability to draw diverse investment flows reflects its well-developed capital markets, advanced infrastructure, and strategic role as a gateway to the broader African market.
The report highlights a 30% surge in private debt transactions across Africa, particularly in high-growth sectors such as renewable energy, infrastructure, and financial services. This trend suggests a shift towards alternative financing structures as investors seek to mitigate currency risks and regulatory uncertainties while ensuring stable returns.
Impact of Economic and Policy Developments
According to Stears, Kenya’s investment climate in 2024 was shaped by significant economic and policy shifts. The June protests, though temporarily dampening investor sentiment, led to important reforms that enhanced market predictability. The Central Bank of Kenya (CBK) introduced key monetary policy measures, including an interbank interest rate corridor and a market-based approach to foreign exchange rate reporting, improving inflation control and liquidity management.
To address fiscal pressures, Kenya issued a $1.5 billion Eurobond buyback in February 2024 to partially settle its inaugural $2 billion Eurobond due in June 2024. Additional financial support came from the World Bank, which approved $1.2 billion under the Kenya Fiscal Sustainability and Resilient Growth Development Policy Operation (DPO) in May 2024, and a $606 million disbursement from the International Monetary Fund (IMF) in October 2024. These measures alleviated liquidity constraints and bolstered investor confidence.
Furthermore, Kenya’s Economic Partnership Agreement (EPA) with the European Union, signed in December 2023 and implemented in July 2024, granted duty-free and quota-free access to the EU market for Kenyan exports. This move has provided a significant boost to the country’s agricultural and industrial sectors, opening new trade and investment opportunities.
Despite these positive developments, Kenya faced credit rating downgrades from Moody’s, S&P Global, and Fitch, all of which lowered the country’s long-term sovereign rating to “B-” due to fiscal and debt concerns following the withdrawal of the Finance Bill 2024. However, the outlook remains stable, with expectations of sustained economic growth and continued access to concessional financing.
2025 Outlook: Optimism Amid Structural Challenges
Looking ahead, Kenya’s economic growth is projected to reach 5.1% in 2025 and 5.5% in 2026, driven by increased private investment, export expansion, and strong consumer spending. Easing inflation and improved credit availability are expected to further support growth.
Stears forecasts that the CBK may cut interest rates by 25–50 basis points in 2025, with inflation remaining broadly contained due to stable fuel prices, food supply, and a predictable exchange rate. The Kenyan shilling is expected to stabilize at approximately 132 to the US dollar by the end of 2025. However, continued government borrowing could exert upward pressure on interest rates.
Challenges remain, including political risks, regulatory uncertainties, and structural constraints such as high public debt and limited fiscal space. Nonetheless, the government’s commitment to reducing expenditure, securing international capital, and maintaining IMF-backed reforms is expected to mitigate these risks.
Overall, Kenya and South Africa’s strong investment performance in 2024 reflects the growing confidence in African economies despite global economic volatility. With strategic reforms, policy stability, and increased private sector participation, Kenya is well-positioned to maintain its momentum as a leading investment destination on the continent.
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