Despite geopolitical tensions and a deteriorating macroeconomic situation worldwide, Egypt remained one of the most attractive destinations for investors in Africa over the past year. The country accounted for 57% of the value of transactions carried out in North Africa.

Private equity funds injected a record $877 million into Egyptian companies in 2022, despite an extremely difficult global macroeconomic environment, according to a report published in April by the African Private Equity and Venture Capital Association (AVCA).

Entitled "2023 AVCA Country Spotlight: Egypt", the report indicates that this amount is 79% higher than in 2021. Egypt accounted for 57% of the value of private equity transactions in North Africa over the past year, compared with 19% for Morocco, 10% for Algeria, and 1% for Tunisia, while 13% of investments were made in companies operating in the region, but headquartered elsewhere.   

The growth in invested amounts recorded in Egypt in 2022 reflects the rise in mega-deals in the $100-250 million range, which accounted for almost a third of the total value of transactions. Transactions in the $10-49 million range also almost doubled compared to 2021.   

The increase in the value of private equity transactions is mainly due to the country's "relatively solid and stable economic situation, which has made it attractive to investors from all over the world". The International Monetary Fund (IMF) forecasts economic growth of 4% of Egypt's real GDP in 2023. It is also confident about the country's medium-term prospects, which remain favorable subject to improved macroeconomic stability, a sustainable shift to a flexible exchange rate, and significant progress in implementing structural reforms aimed at improving corporate competitiveness and the business environment.

Industry and finance industries attracted the most funding 

The report also reveals that the total number of transactions has grown by 64% to 76 deals compared to 2021.

In terms of transaction volumes, Egypt also tops the podium in North Africa. The Arab world's most populous country accounts for 64% of the region's transaction volumes, compared with 20% for Morocco, 8% for Tunisia, 1% for Algeria, and 7% for companies active in the region but headquartered elsewhere in the world.

The sectoral breakdown of investments made in 2022 shows that the industrial sector was predominant. This sector accounted for 26% of the value of transactions, ahead of finance (23%), healthcare (21%), information technology (18%), and consumer discretionary (9%).

The report also indicates that the cumulative value of private equity transactions carried out in Egypt between 2012 and 2022 reached $3.3 billion, spread over a total of 262 deals. This placed Egypt in the fourth position of the most popular destinations for private equity investors in Africa, behind South Africa, Nigeria, and Kenya.