On Africa Day, our Africa-focused lawyers share some of the reasons to celebrate the continent’s exciting opportunities and the increasingly significant role it is playing in the global economy.

1. African countries are increasingly playing a significant role in the global economy and several industries are showing rapid growth, including infrastructure and energy. Investors that are successfully able to manage risks are finding that many of the continent's biggest challenges are also providing its greatest opportunities. Kamal Nasrollah, Managing Partner, Casablanca

2. While last year was challenging for mergers and acquisitions in sub-Saharan Africa (SSA), with political and economic uncertainty prompting investors to adopt a cautious stance, and smaller and safer investment choices, certain sectors showed resilience, for example the financials, technology, media and telecommunications (TMT) and energy sectors. According to LSEG Workspace, the financials sector saw the highest volume of M&A transactions across SSA in 2023, 23 deals in total. The African energy and power sector announced a total of 13 deals in 2023, including those in the oil and gas and renewable energy industries. TMT also announced 13 deals in 2023. These included new market entries in the digital infrastructure space, motivated by the ever-increasing demand for Internet access, supported by advances made by multinational hyper-scalers in landing additional subsea cables such as the 2Africa cable connecting the continent to Europe and Asia, and the construction of more data centres. Overall, transactions that ensure a meaningful focus on socioeconomic transformation and sustainable growth will reap the biggest M&A rewards in Africa in the years ahead. Mike van Rensburg, Partner, Corporate/M&A, Johannesburg

3. The rollout of 5G has been transformational in a variety of industries in Africa. Innovative projects such as enhanced asset tracking and logistics, energy monitoring, healthtech and telehealth, and precision agricultural tools, for example, have seen leapfrog growth in opportunities because of the high bandwidth wireless internet access that 5G offers. Such high-speed connectivity, low latency and efficient data transmission that come with the growing adoption of 5G also mean that cloud-based services such as video or music streaming and gaming are booming across the continent, leading to further opportunities for investment and new and interesting emerging market avenues for growth. Janet MacKenzie, Partner, Head of IPTech, Johannesburg

4. Financial sector innovation has led to the development of mobile payment systems and digital trading platforms. For example, enhanced digital payment systems are assisting to facilitate trade across the continent and opening up opportunities to invest in products and services that are traded across the AfCFTA. Consumers are also enjoying the benefits of digital developments, especially those that support financial inclusion and online retail platforms. More than half of the world's mobile money customers are now based in Africa and innovative financial service offerings are opening up to mobile money users. Further, fintech accounted for 25% of all venture capital rounds in SSA in the last few years. Bringing the unbanked into the financial mainstream has created further openings for innovative financial solutions and the user markets are huge, with plenty of room for more growth and synergy in segments such as alternative lending, digital investment and neo-banking. Ashlin Perumall, Partner, IPtech, Johannesburg

5. The African Continental Free Trade Area (AfCFTA) is predicted to increase Africa's trade income by USD 450 billion by 2035 and will boost intra-African trade by more than 81 percent, according to the World Bank. Several countries are now trading under the continental free trade area, with South Africa joining other active AfCFTA trading countries in January 2024. Current product lines being traded across the free trade area include food and beverages, consumer goods, and industrial and healthcare products. Eight countries - Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia - were the first to be given the opportunity to participate in free trade in Africa under AfCFTA's Guided Trade Initiative. While there is still a way to go further to facilitate trade by removing certain non-tariff barriers, overall we remain optimistic that the main building blocks are in place for this agreement to achieve the desired objectives. Virusha Subban, Partner, Head of Tax, Johannesburg

6. The volatility in Africa’s capital markets is leading to the increased availability and competitiveness of Export Credit Agency (ECA)-supported funding as a diversified source of liquidity for deals. ECAs have an essential role to play in supporting trade in Africa, and their government backing means they are able to act as guarantors to lenders, reducing risks in the process. The role of ECAs in facilitating deals in Africa is also evolving. For example, there is an expanding number of ECA programmes and products covering projects related to the trade in renewables, raw materials and critical minerals in Africa. Michael Foundethakis, Partner, and Global Head of Project and Trade & Export Finance, Paris

7. Appropriate staffing solutions is a challenge but also potential differentiator in a competitive environment. We assist our clients to find the most suitable people solution across multiple jurisdictions across our vibrant continent. Businesses willing to embrace challenges often attract like-minded employees who will collaborate and find business solutions suited to our bustling workplaces. Multinational companies can unlock strategic advantages by tapping into the rich latent talent market available in many African jurisdictions. Johan Botes, Partner, Head of Employment, Johannesburg

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