Research by World Mobile shows that two out of three VC and private equity executives expect a $1 billion-plus rise this year and another $1.5 billion-plus by 2025.

Private capital investment in Africa is set to reach new highs this year and for the next three years as money goes into Africa-focused funds and new projects, research for blockchain-based mobile network operator World Mobile reveals.

The study focuses on senior executives at venture capital and private equity companies across the UK, the US, the Middle East, Singapore, Hong Kong, France, and Germany, who are increasingly optimistic about the benefits of improving internet connectivity. However, failure  to improve connectivity could damage investment growth, the research adds.

The firm said a record 429 private capital investments in Africa were seen last year, worth a total $7.4 billion, while Africa-focused funds across the array of private capital attracted $4.4 billion. This was also a new high and 63 per cent above the average of $2.5 billion for the past five years.

The research added that nearly two out of three believe that private capital investments will rise to $8.5 billion or more this year, while 68 per cent forecast the total will reach $10 billion a year by 2025.

Around 66 per cent expect Africa-focused funds to raise $4.5 billion or more this year, while 53 per cent predict that the annual funds raised will exceed $6 billion a year by 2025.

Improvements in internet connectivity across the continent will be a key factor in the surge in confidence among venture capital and private equity investors, with more than half believing that the spread of internet access across the continent will dramatically increase investment over the next five years, the research shows.

World Mobile focuses on internet connectivity in Africa and is working with the government in Zanzibar. Its solution includes launching a unique hybrid mobile network providing connectivity supported by aerostats backed up with a range of technologies including mesh networking, hybrid spectrum, renewable energy, and blockchain.

World Mobile, which is in discussions with government officials in Tanzania and Kenya, plans to expand the network throughout the continent as well as other territories underserved by traditional mobile operators.

Welcoming the findings, Micky Watkins, CEO of World Mobile said: “Africa is already experiencing a boom in private capital investment with last year seeing record highs in funding for projects and money raised by funds.”

“Private equity and venture capital executives are increasingly seeing the opportunities in the continent and the research underlines their confidence in continuing to expand investment across Africa with the increase in internet connectivity [being] a key factor,” he added.

“The importance of internet connectivity to economic development will only grow in the future but there are still areas where delivering affordable and reliable connectivity remains an issue,” he said.

World Mobile’s balloons will be the first to officially launch in Africa for commercial use, offering a more cost-effective way of providing digital connection to help bring nearly four billion people online before 2030 in line with the UN and World Bank’s SDGs.

Back in 2019, the EU also stepped up efforts to catalyse public-private investment in African agriculture, with the launch of the Agri-Business Capital Fund. The blended finance impact fund, which received money from the European Development Fund, aims to increase agricultural smallholders' access to finance through loans. The fund, which forms part of the Africa-Europe Alliance for Sustainable Investment and Jobs, is designed to create 10 million jobs in Africa in five years.