By Dalu Ajene
Global dealmaking is recovering unevenly, but Africa is not yet participating at the scale its companies require. In the first nine months of 2025, Africa’s total deal value fell by about 24% year-on-year, while M&A transactions targeting African companies dropped by nearly 46%, even as global deal value rose by around 10%. Across Africa excluding South Africa, deal value declined a further 6% to US$6.85 billion over the same period, after a 10% fall in 2024, while the number of deals fell to 259 from 282. In the first half of 2025 alone, deal value across Africa excluding South Africa fell 16% to US$4.66 billion, with volumes down 21% to 174 transactions and 55% below H1 2022 levels. That matters because consolidation is one of the ways African companies build regional reach, deepen supply chains and create the operating scale needed for sustainable growth.
While Africa requires more capital, the immediate problem is that available funding structures do not match corporate growth patterns. The more fundamental question, then, for financial institutions (and regulators) is whether the capital available to African companies is structured in a way that matches how they grow.
Acquisitions are long-term investments in future cash flows, not standard working-capital events. A company that buys a competitor, enters a new market or integrates a supplier is making a long-term bet on future earnings, synergies and market access. Yet too often African mid-sized firms are offered debt structures designed for short-cycle liquidity needs, with fixed amortisation profiles that do not reflect the integration period after a transaction closes.
These rigid structures fail to account for the initial costs and uneven cash flows following an acquisition. Integration costs, systems migration, restructuring, working-capital build-up and deferred consideration can extend well beyond the closing date. If a buyer must deplete its working capital to fund a purchase, it weakens its own operations. Conversely, if the only alternative is to surrender excessive equity in a market where private equity deals in H1 2025 fell to 75 transactions worth US$341 million, from 121 deals worth US$554 million a year earlier, owners may reject strategically sound deals.
This is where acquisition finance becomes important: lending structured around the cash flows, assets and resilience of the business being acquired, not simply the buyer’s historic balance sheet. Used responsibly, it can give companies room to execute transactions without pretending that every acquisition produces neat monthly cash flows from day one. In more mature markets, this discipline is part of the corporate finance toolkit, particularly for transactions where integration costs, deferred consideration, earn-outs and working-capital requirements can stretch over several years. Africa needs more of that toolkit, adapted to local risk, currency and governance realities.
Acquisition finance is only as good as the discipline behind it. It depends on predictable, defensible cash flows, credible integration plans and lenders willing to test assumptions rather than merely admire growth stories. But if those standards are met, the absence of suitable instruments should not be the reason strategically sensible deals fail to proceed.
At Standard Chartered, we see this from the perspective of a bank that connects African clients to capital, counterparties and sector expertise across our footprint. The Group’s Corporate & Investment Banking business serves more than 17,000 clients across the world’s most active trade and investment corridors, and in 2025 delivered US$5.9 billion in underlying profit before tax, up 9%, with a 15.8% underlying return on tangible equity. In February 2026, Standard Chartered acted as sole financial advisor to Eni on the sale of a 10% participating interest in Côte d’Ivoire’s Baleine Project to SOCAR. The transaction further consolidated the Bank’s position as the number one M&A advisor in energy and infrastructure across Africa, Asia and the Middle East, with 11 deals announced and/or closed between 1 January and 31 December 2025. It is not a template for the wider mid-cap market, but it does show that complex, cross-border African transactions can be structured and executed when advisory, risk allocation and sector knowledge come together.
The lesson is straightforward: African financial systems can support larger programmes when risk is deliberately distributed rather than concentrated on a single balance sheet. This is particularly important in sectors such as energy, infrastructure, consumer goods, financial services and telecommunications, where scale is often achieved through assets that serve more than one market. The solution is not to minimise risk on paper, but to share it more intelligently among sponsors, lenders, DFIs and strategic investors.
There is a second gap that may be just as important: qualification. Many companies may not know what “M&A-ready” looks like from a lender’s perspective. If criteria are informal, inconsistent or opaque, good borrowers waste time guessing, while banks see too many proposals that are not ready for serious credit assessment.
Market efficiency requires clear qualification standards. Lenders must codify their requirements, including earnings quality, debt-service capacity, leverage discipline, governance, integration capability and foreign-exchange resilience, so that borrowers can prepare before seeking credit. That discipline matters in a higher-rate environment: when acquisition financing becomes more expensive, even a small mismatch between debt tenor and cash-flow generation can decide whether a transaction strengthens a company or overburdens it. DFIs and banks should work together on frameworks that make readiness transparent, which would also protect the market from excess.
Recent data also shows that Africa’s consolidation story is increasingly regional. In 2025, South Africa, Kenya and Egypt accounted for about 70% of Africa’s recorded M&A deal value, with South Africa representing 35%, Kenya 20% and Egypt 15%. Egypt recorded more than 200 transactions, South Africa just under 200, while Morocco registered nearly 100 transactions, around 65% more than in 2024. Inbound deal value into African companies rose by more than 40% compared with the previous year and outbound deal value by African acquirers increased by nearly 85%. At the same time, intra-African deal volumes remained broadly stable even as value declined, suggesting that the industrial logic for regional consolidation remains intact, but financing capacity has not kept pace with the opportunity.
The goal is not to encourage indiscriminate debt. Africa requires disciplined consolidation that strengthens productive capacity, supply chains and regional competitiveness. That is especially true when consumer goods alone recorded more than 180 M&A transactions in 2025, and energy remained one of the largest sectors by value, both sectors where scale, distribution and cross-border execution matter. Banks must provide structuring expertise, DFIs must define the role of acquisition finance in their mandates and regulators must ensure that financial systems do not obstruct responsible consolidation.
The bottleneck in African growth is not a lack of ambition. It is the absence of appropriate financial architecture to turn credible corporate ambition into responsible dealmaking, regional scale and long-term productive capacity.