Insight type: Article

In 2050, Africa’s cities will look nothing like they do today. Projections show the continent’s urban population tripling, with nearly two-thirds of Africans living in towns and cities. Seventeen of those will be “mega-cities” with populations above 10 million, placing Lagos, Kinshasa, and Cairo alongside the world’s largest metropolitan areas. Nigeria’s urban population alone is expected to reach 250 million, the fourth largest globally, while Egypt will rank in the top ten with 147 million.

For investors, this demographic transformation should not be viewed as a looming crisis of overcrowding and strained infrastructure. It is, in fact, the single largest growth opportunity of the century. The question is not whether Africa will urbanise, but how investors and governments choose to manage and monetise this transformation.

Africa’s economic landscape is dominated by SMEs, which constitute 75% to 90% of businesses, according to the World Economic Forum. These enterprises drive growth, innovation, and employment, yet limited access to financing constrains their ability to scale and contribute fully to development. Against this backdrop, private debt emerges as a promising solution to bridge the continent’s massive financing gap.

Kenya has long positioned itself as a premier investment destination in Africa, leveraging its strategic location, advanced financial sector, and a progressive business environment to attract foreign direct investment (FDI). Private equity (PE) and venture capital (VC) funds investing in Kenyan lenders or businesses that provide goods and services to Kenyan consumers have played a pivotal role in financing critical sectors such as infrastructure, manufacturing, and financial services.

Tanzania presents unique opportunities for Private Equity (PE) and Venture Capital (VC) investors, particularly in sectors such as agriculture, manufacturing, tourism, and infrastructure. However, navigating the legal and regulatory landscape regarding foreign land ownership is a critical consideration for investors looking to enter the Tanzanian market.

In 2024 and early 2025, global and African M&A activity reflected a clear trend: quality over quantity. While the number of deals declined, the total value of transactions rose, pointing to a focus on high-value, strategic investments.

Tanzania has set ambitious targets as part of its commitment to the Paris Agreement, aiming to connect 8.3 million additional households to the grid, increase electricity access from 46% to 75%, and achieve a 75% renewable energy mix by 2030. Following the full commissioning of the Julius Nyerere Hydropower Project in April 2025, the country’s energy capacity has seen a significant boost, with hydropower now accounting for 67.4% of domestic generation.