Despite a challenging environment, with public debt approaching critical levels in some countries and concerns over excessive reliance on oil, African businesses are expanding.

PricewaterhouseCooper’s (PwC’s) analysis of 75 companies that are featured in the inaugural ‘Companies to Inspire Africa 2017’ report, compiled by London Stock Exchange Group (LSEG) in partnership with the Africa Development Bank Group, CDC Group and PwC, provides clear evidence of significant investment and growth in African business.

PwC points out that about $13.5-billion was raised in the equity capital markets in Africa by African companies in non-African capital markets in 2017 – a 49% increase from 2016.

Similarly, $7.5-billion in non-local currency debt was raised by African companies in international debt capital markets – a 68% increase from 2016.

Further, 15 of the 75 companies have obtained additional financing, raising $1.9-billion in total; 28 companies have completed either a product, geographic or capacity expansion; 21 companies entered into an alliance or joint venture (JV); and 16 companies completed a merger or acquisition.

PwC Africa deal origination leader Simon Venables says the success of these businesses tells an important story to the world – there is huge potential in Africa. “Companies are growing, but they need external interest and investment for this to continue.”

He adds that while supportive governments that are creating enabling environments and access to funding clearly play significant roles, business transparency and accountability are also essential ingredients to attract a wider audience and fuel the growth of African companies.

PwC Nigeria corporate finance partner Andrei Ugarov comments that for UK investors, Africa offers economic growth that continues to outpace established nations.

“A swelling middle class, advances in technology and the rise of entrepreneurship have boosted the number of consumers, making the continent more appealing than ever.”

PwC says that companies from Kenya, Nigeria and South Africa are leading the way in spreading their African footprint beyond their borders. Financial services, consumer services and energy are the sectors where most expansion took place.

The 21 companies featured in the report that formed alliances and JVs in the past year, were predominantly companies based in Kenya, Nigeria and South Africa, with industrial products and telecoms and technology being the dominant sectors.

Mergers and acquisitions continue to be a critical aid for growth. Of the 75 businesses analysed, 16 concluded merger and acquisition deals in a range of sectors including consumer services, financial services, healthcare and pharmaceuticals, industrials, renewables, technology and transportation.

LSEG international development head and LSE CEO Nikhil Rathi notes that high-growth small and medium-sized enterprises are the engine for growth in Africa’s economies, owing to their innovation.

“Many of the businesses identified in the ‘Companies to Inspire Africa 2017’ report have successfully secured capital to finance their continued success and growth, through equity and bond issuances, and establishing new global partnerships.

It is exciting to see the progress of so many firms outlined in this report, and we warmly congratulate them on their outstanding performance,” concludes Rathi.