Africa’s M&A landscape shrinks amid investor retreat, despite energy sector bright spots

Africa’s mergers and acquisitions (M&A) activity fell sharply in the first half of 2025, with deal volumes declining by 21% and total values down 16% compared to the same period last year.
According to a new report by DealMakers Africa, foreign investors are retreating from the continent due to global interest rate hikes, a strong U.S. dollar, and rising political and economic instability across key African markets. The M&A downturn has been particularly hard on private equity (PE). PE deals fell from 121 in H1 2024 to just 75 this year, with total PE transaction value dropping to $341 million. Notably, all 174 recorded deals in H1 2025 were executed solely by local investors — underscoring how foreign capital is drying up.
Despite the overall slump, Africa’s energy sector has remained relatively active. Two high-value transactions — Vitol’s $1.65 billion acquisition of Eni assets in Côte d’Ivoire and Congo, and Shell’s $510 million purchase of TotalEnergies’ stake in Nigeria’s Bonga field — together accounted for nearly half of all M&A value across the continent.
While challenges persist — including weak institutional capital, unstable currencies, and limited IPO and exit options — analysts remain cautiously optimistic. Africa’s long-term fundamentals, including rapid urbanization, demographic growth, and pressing infrastructure needs, still offer potential for “patient capital.” As several countries revise licensing terms and launch new bid rounds, the stage is quietly being set for a possible rebound — albeit on more cautious terms.