Private Equity in Ghana

October 26, 2020

Private equity activity in Ghana has continued to grow at a steady pace in recent years, as Ghana remains an attractive destination for foreign investment. Major players include emerging markets focused funds such as Actis, Amethis, LeapFrog and AfricInest; African focused funds like AFIG and I&P; and local or West-African focused funds such as Oasis, Injaro and PCM Capital.

In 2020, private equity M&A deals have been completed mostly in established businesses across a variety of industries, mainly for significant minority shareholdings. However, there appears to be a growing interest in the financial technology sub-sector, dominated by start-ups that are engaged in fundraising activities. There has been a mix of new investments in target companies, add-ons to existing investments, as well as successful exits by way of sale of the investment to other private equity funds.

Tax structuring of investments remains a key focus for private equity funds, some of whom tend to invest through SPVs established in tax-friendly jurisdictions (particularly Mauritius) as compared with direct investments into target companies. Regarding exit conditions, although most investments are governed by pre-emptives, these are rarely exercised by the remaining shareholders. Most deals are characterised by buyer or vendor due diligence activities and typically involve privately negotiated sale and purchase agreements with fairly standard provisions on warranties and indemnities.

 

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