Africa is building rails while global capital concentrates elsewhere. This week, we look at the numbers behind Africa’s measly 0.5% share of global VC, the venture debt gap, what a “good” exit really means in this market and why Joe Studwell argues the private sector story, especially in agriculture, is stronger than most assume. I learned a lot this week and hope you do too!
Figure of the Week
Africa attracted only $2.1B in venture capital in 2025, just 0.5% of the $425B deployed globally. Source: Africa Venture Capital Association 2025 Report.
Graphic of the Week
Africa’s Tiny Slice
Source: AVCA
This week’s graphic comes from the AVCA 2025 Venture Capital in Africa Report. If you follow the Africa Brief, you already know where this is going. Note: AVCA numbers are derived from Crunchbase and totals are lower than some of the reports featured in the Feb. 6 edition.
The Global Backdrop: According to Crunchbase via AVCA, global VC totaled $425B across ~27,000 deals in 2025. Deal volume fell 13% YoY. Capital invested rose 30% YoY. That rebound was not broad-based. According to the report, it was AI.
AI funding nearly doubled to $210B, or 49% of global VC.
Five companies alone raised $84B, or 20% of all global venture capital.
This was not a tide lifting all boats. It was a capital surge into a narrow AI opportunity set.
Regional Divide
North America captured 66% of global VC, or $280B.
Europe reached $58B, up 9% YoY.
Asia fell to $67.2B, a five-year low.
Latin America hit $4.1B, about 1% of global VC.
And Africa?
Venture capital totaled $2.1B in 2025, down 21% YoY.
Deal volume held roughly flat at 432 deals.
Africa was the only region to post a double-digit decline in value.
It also saw minimal megadeals and limited participation in the AI funding boom that inflated global total.
Why It Matters: Global capital is concentrated. AI is absorbing half the market. Megadeals are driving headlines and sadly, Africa remains largely outside that surge.
Source: AVCA
What We Are Reading
Africa: China announced it will scrap tariffs on imports from almost all African nations from May 1, excluding Eswatini due to its ties with Taiwan (Punch); Giorgia Meloni said Italy will let African countries pause debt payments after climate disasters at the African Union Summit (SABC News); Russia is redeploying most of its diplomats expelled from Europe to African countries and reopening about a dozen embassies to expand its influence, Foreign Minister Sergei Lavrov said (Bloomberg).
The Algerian government announced it is fast-tracking $1B for desalination plants to boost water supply and protect agriculture (Bloomberg).
Cameroon: U.S. deported another group of third-country migrants to the country under secretive agreements, as lawyers raise concerns over due process and human rights (AP News).
Gabon: Authorities suspended social media platforms as protests over rising living costs tested President Brice Oligui Nguema’s leadership (Bloomberg).
Ghana paid GHS 10B, about $909M, in interest under its Domestic Debt Exchange Programme as it works to restore investor confidence and stabilize its economy after restructuring (Reuters).
Egypt’s benchmark EGX30 index has surged 27% in dollar terms this year, outperforming emerging and developed markets as investors respond to currency stability, rate cuts, privatization plans and renewed reform momentum (Bloomberg); Egypt’s Breadfast raised $50M in a pre-Series C round backed by Mubadala, the Olayan family and SBI as it prepares for expansion across North and West Africa and positions itself for a future global IPO (Bloomberg).
Ethiopia: Electric vehicle sales are surging after the government banned fossil fuel car imports to cut fuel subsidies and tap cheap hydropower (Bloomberg).
The Kenyan government planned to issue new dollar bonds and buy back 2028 and 2032 eurobonds to capitalize on falling borrowing costs (Bloomberg).
The Malian government renewed Barrick Mining’s Loulo permit for 10 years after resolving a dispute over profit sharing and control of its largest gold complex (Reuters).
Niger: Military junta struggled to sell 1,000 tonnes of seized uranium worth about $240M as legal threats from Orano and rising ISIS attacks complicate exports (FT).
Nigeria’s electoral commission set February 20, 2027, for the next presidential election as President Tinubu prepares for a likely re-election bid amid opposition coalition talks and renewed tensions over electronic vote transmission (Semafor); A 31% stock market rally has restored valuations erased by the naira devaluation, making it one of the world’s top-performing markets this year (Bloomberg).
The Senegalese government secured enough regional funding to cover nearly $485M in eurobond payments due in March, easing debt concerns (Bloomberg).
Sierra Leone: An investigation found that senior officials enabled the construction of illegal luxury mansions in a protected national park, threatening water supplies and forests near Freetown (AP News).
Somalia: One million people faced severe hunger as drought worsens across the Horn of Africa and aid funding falls short (Bloomberg).
South Africa: Adventure tourism generated $656M in direct revenue and $1.37B total impact in 2024, supporting 91,000 jobs as the country seeks a larger share of the fast-growin global market (Business Insider); The unemployment rate fell to 31.4% in the fourth quarter its lowest level since 2020 as construction and social services added jobs (Bloomberg).
Sudan: Drone strike on a market in North Kordofan killed at least 28 civilians as war between the army and RSF nears its third year (AP News).
Business & Finance in Africa
Venture Debt Gap
Source: Partech
Equity Isn’t Enough: FMO’s February 2026 report, Landscape Study on Debt Financing to Tech-Enabled Startup and Scale-Up Companies in Africa, makes a simple point: Africa’s startups need debt but the market is not built for it yet.
According to the report:
Equity dominates startup financing across the continent.
Early-stage debt remains limited and fragmented.
The $1M to $5M ticket size is particularly underserved.
Demand is growing, especially from revenue-generating startups that want to avoid dilution.
Supply is cautious and the constraints are predictable:
Limited local currency funding.
High due diligence costs relative to deal size.
Regulatory barriers.
Thin pipelines of “debt-ready” companies.
The Divergence: While venture capital has reset and concentrated globally, Africa’s capital stack remains shallow. Venture debt is emerging but lacks scale, standardized structures and risk-sharing mechanisms.
The report argues that blended finance, guarantees and catalytic capital can unlock this layer of the market. Read more: FMO.
Exit, Redefined
Source: Briter via Tech Safari
This week, I appreciated an article in Tech Safari where Sheriff Alimi reframes the exit debate in African tech. He says the question is not, “Was it big enough?” But rather should be, “What did it build?”
Headline exits spark noise. InstaDeep sold for $680M. Mono exited for ~$30M after raising $17.6M. But zoom out.
60+ exits in 2025, up 43% YoY.
Most were strategic acquisitions, secondaries or acqui-hires.
Many involved startups buying other startups.
Liquidity is forming. It is just not always flashy and perhaps it’s true that Africa’s most important startups are infrastructure builders:
Paystack and Flutterwave built commerce rails
Mono built identity and credit rails.
InstaDeep built AI rails.
BuuPass* is digitizing public transport in Kenya.
And there’s so many more he didn’t mention.
These companies did not just scale. They laid foundations. I like the thesis that perhaps in Africa, exits often signal that a foundational system matured enough to plug into something bigger. An exit is not just a cash-out. It is proof the rail works. Read more: Tech Safari
Disclosure: BuuPass is a Renew Capital portfolio company.
Economics in Africa
Cowen Bullish on Africa
Source: Conversations with Tyler
This Conversations with Tyler episode with Joe Studwell is one I loved, though I am not sure I’d want to be interviewed by Tyler. Thanks, John Kriegsman, for sending it over! Joe is positive, sharp and well researched.
Summary: Studwell makes a contrarian case that Africa’s biggest development constraint has been low population density, driven in part by a uniquely severe disease burden. He argues density shapes markets, labor pooling and agricultural productivity more than the usual governance-first storyline.
He uses Nigeria as a complicated example. The Niger Delta and Lagos benefit from density but Nigeria’s ethnic fragmentation and past conflict limit how much density alone can deliver.
He also flags Botswana as an outlier for a different reason: it is essentially a diamond economy that does not need much labor.
Studwell’s optimism is not about governments. It is about the private sector, especially agriculture.
His big claim: Africa has seen the fastest agricultural GDP growth since 2000, about 4.5% and that shift is starting to produce the first cross-border private-sector giants in agribusiness.
On manufacturing, he argues Africa still has a path, starting with garments and textiles, because wages can be a fraction of China’s and because robotics is not as cheap or flexible as people assume.
Bottom line: if you want a grounded, hopeful framework, this is a strong listen and Studwell has a new book out: How Africa Works: Success and Failure on the World’s Last Developmental Frontier. I haven’t read it yet but if you liked the podcast above, you might also listen to What are the Rules of Economic Growth? With Joe Studwell. I can’t get enough!
Explorations in Africa
River Festival Returns
Source: AP News
Thousands descended to the milky waters of the Matan Fadan River in Argungu in northwestern Nigeria, reviving Nigeria’s UNESCO-listed fishing festival after a six-year pause driven by insecurity.
Last week, under the 39°C heat, fishermen used handwoven nets, calabash gourds and bare hands to compete. This year’s winner, Abubakar Usman, hauled in a 59 kg croaker, earning NGN 1M and two cars. Smaller catches were sold nearby, boosting the local economy.
Founded in 1934 to mark peace between Argungu and the Sokoto Caliphate, the festival has long symbolized unity. Competitors came from Niger, Chad and Togo, reinforcing its regional pull.
President Tinubu attended and called it a return to stability. Attendance remains thinner than in its heyday but for many, Argungu’s pride is back in the water.
Thanks for reading. In case you missed it, check out last week’s Graphic of the Week on $29.5T Beneath Africa. We hope to see you next week.
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