South Africa and Nigeria have been identified as the top destinations for investment deals in Sub-Saharan Africa (SSA) over the next few years, according to the Doing Deals in Sub-Saharan Africa 2024 report published by KPMG. The report highlights that despite recent challenges, investment flows and transactions in SSA have remained resilient, offering attractive opportunities for risk-adjusted returns.

The report notes that investor appetite is returning, with foreign direct investment (FDI) expected to reach 2.13% of gross domestic product (GDP) in 2024, up from 1.74% last year, according to the International Monetary Fund (IMF). East Africa emerged as the most impressive sub-region in terms of recent investment experiences, with 26% of respondents who had recently closed deals in the region expressing a significantly increased likelihood of investing in SSA again.

Looking forward, the more developed African nations are expected to attract more future investment deals, indicating that these countries will remain key targets for investors seeking opportunities on the continent. The report revealed that the top destinations for investment in the next two years are South Africa (28%) and Nigeria (26%), followed by Kenya (14%).

The mining sector recorded significant investment activity in SSA, accounting for three of the region's top ten transactions in 2023 involving mining companies based in Botswana, South Africa, and Zimbabwe. The total deal value in the mining sector surged by 140% year-on-year, reaching $5 billion, with MMG's acquisition of Khoemacau Copper Mining being a notable highlight.

The energy sector also garnered significant attention, with a 10% increase in deal volume year-on-year. The sector accounted for three of SSA's top ten transactions, underscoring its critical role in the region's investment landscape. Energy, mining, and technology are set to lead future deals in Sub-Saharan Africa, with investors seeing mining (71%) and oil & gas (51%) as the most promising sectors for M&A opportunities over the next two years.

The report's findings suggest that investors are increasingly optimistic about the prospects of SSA, driven by the region's growth potential, natural resources, and improving business environment. As the continent continues to attract investment, it is likely that South Africa and Nigeria will remain key destinations for investors seeking to tap into the region's growth opportunities.

The report's insights provide valuable guidance for investors, policymakers, and businesses looking to navigate the complex investment landscape in SSA. As the region continues to evolve, it is crucial to stay informed about the latest trends, opportunities, and challenges shaping the investment landscape.