The DealMakers AFRICA 2024 Annual is out.
Make sure to get your submissions in for Q1 2025 now!
DealMakers AFRICA Annual 2024 issue
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M&A Regional Analysis | PE Regional Analysis | Biggest M&A Deals 2024
Individual DealMaker of the Year 2024 (East Africa)
Deal of the Year 2024 (East Africa)
Private Equity Deal of the Year 2024 (East Africa)
Special Recognition Award 2024
West Africa League Table 2024
Individual DealMaker of the Year 2024 (West Africa)
Deal of the Year 2024 (West Africa)
Private Equity Deal of the Year 2024 (West Africa)
THORTS
• Public participation – key to PPPs
by Kevin Kipchirchir and Njeri Wagacha | CDH Kenya
by Tapiwa John Chivanga | Scanlen & Holderness
• Logistical challenges & solutions in African e-commerce
by Konrad Fleischauer and Bhargav Desai | PSG Capital
• Legal tech in M&A transactions
by Tevin Ramalu and Lemont Shondlani | DLA Piper Advisory Services
CONTENTS
FROM THE EDITOR'S DESK
Africa’s mergers and acquisitions (M&A) and private equity (PE) landscape showed resilience in 2024. This despite global economic uncertainties, rising inflation and increased capital costs – complicated by currency volatility and exchange controls – which collectively served to constrain deal-making activities across the continent.
This is reflected in the regional analysis by DealMakers AFRICA for 2024 (pg 4). The number of deals/transactions recorded for the period was 424, down just 11% on 2023 numbers and stemming the 30% decline of the previous year. The value of deals rose 32% year-on- year, to US$14,74 billion – largely attributed to M&A activity in the mining and energy sectors in West Africa (pg 5). As an extension of this, West Africa witnessed the greatest M&A activity by value and flow ($7,97 billion from 135 deals). East Africa recorded 126 deals, of which 73 were in Kenya; North Africa followed with 92 deals valued at $1,6 billion. The most notable deal, by value, was the disinvestment by Société Générale of stakes in its Moroccan businesses to the Saham Group for an aggregate $1,2 billion
Private equity deal activity once again constituted 50% of the annual deal flow, continuing a trend established several years ago and providing support for M&A growth on the continent. Not surprisingly, given the macroeconomic environment, deal flow in this space is down some 40% on 2022 levels (pg 6). Sectors pivotal in shaping the PE landscape across the continent during 2024 included fintech and e-commerce, financial services, healthcare, manufacturing and renewable energy – a focus where Africa presents significant growth opportunities. Energy deals have become vital for Africa’s economic development, electrification, industrialisation, and climate action. Not only do they bring investment, job creation, regional integration, good governance and environmental sustainability, they are crucial for long-term success.
Deal-making activities in 2025 will be driven by strategic investments and development priorities. M&A activities remain vital for shaping the African trading market landscape, offering a pathway for companies to enhance their competitiveness and expand their reach internationally.
The Trump administration’s policies will present an uncertain and complex landscape for M&A and investment in Africa in the year ahead, and while protectionist trade measures and foreign aid reductions may pose challenges, strategic economic engagements and shifts in global partnerships could create new opportunities. As is the African way – glass half full.
Hearty congratulations to the dealmakers of North, East, West and Southern Africa, whose hard work and perseverance in getting deals and transactions across the finishing line is not to be underestimated. DealMakers AFRICA acknowledges the work done by the M&A industry in East and West Africa, the results of which are recorded on the pages of this magazine. Congratulations to the winners and shortlisted nominees.
Marylou Greig
THORTS
Public Participation: A key element of any public private partnership in Kenya
Kevin Kipchirchir and Njeri Wagacha
How are public private partnerships (PPPs) supposed to be entered into? That was the central question that a section of the Kenyan public asked when it emerged last year that the Government had entered into a PPP with Adani Airports Holdings Limited, a subsidiary of the Adani Group, to lease Jomo Kenyatta International Airport for thirty (30) years (the JKIA Deal).
The JKIA Deal was marred by allegations of corruption and bribery, shrouded in secrecy and hurriedly executed. It was also alleged that it violated a number of laws which should guide how PPPs are entered into in Kenya.
While the matter was not determined by the courts on its legality, on 21 November 2024, President Ruto announced that he was cancelling the JKIA Deal, following the indictment in New York of Gautam Adani and his fellow executives in connection with alleged schemes to pay hundreds of millions of dollars in bribes. At the same time, the Government – through the Kenya Electricity Transmission Company (Ketraco) – announced the signing of a power PPP project allowing Adani Energy Solutions, another subsidiary of the Adani Group, to develop and operate transmission lines for thirty (30) years.
Questions have been raised with respect to how this PPP was entered into and, as court proceedings are currently ongoing, it may very well be (as you will see below) that a quashing order is imminent.
PROVISIONS OF THE LAW
Article 227 of the Constitution of Kenya, 2010 (the Constitution) provides that when a state organ or any other public entity contracts for goods or services, it shall do so in accordance with a system that is fair, equitable, transparent, competitive and cost- effective.
![Kevin Kipchirchir_background_edited[11].jpg](https://static.wixstatic.com/media/cf215e_af90266eea6d4c3ca9d9ea9d078263c9~mv2.jpg/v1/crop/x_475,y_126,w_1107,h_1378/fill/w_155,h_193,al_c,q_80,usm_0.66_1.00_0.01,enc_avif,quality_auto/Kevin%20Kipchirchir_background_edited%5B11%5D.jpg)
Kevin Kipchirchir
![Njeri Wagacha_Background Edited [68].jpg](https://static.wixstatic.com/media/cf215e_21777fdecf4941f1b840bdfff21f6c8a~mv2.jpg/v1/crop/x_269,y_139,w_897,h_1117/fill/w_155,h_193,al_c,q_80,usm_0.66_1.00_0.01,enc_avif,quality_auto/Njeri%20Wagacha_Background%20Edited%20%5B68%5D.jpg)
Njeri Wagacha
Additionally, Article 201 of the Constitution provides that in this process, there shall be openness and accountability, including public participation in financial matters. This requirement is to be read together with Article 10 of the Constitution, which provides that whenever implementing public policy decisions, the Government is bound by the national values and principles, including participation of the people, transparency and accountability.
PPPs under the PPP Act relate to the financing, construction, development, operation or maintenance of infrastructure or development projects.
There are different procurement methods allowed under the PPP Act, including direct procurement, privately initiated proposals (PIPs), competitive bidding, and restricted bidding. Further, the PPP Act mandates certain prequalification procedures mandatory for a contracting authority (defined as any state organ, at any level, intending to have its functions undertaken by a private entity), which include ascertaining the expertise, financial capacity, experience and due diligence checks of the private party before entering into a PPP.
Importantly, direct procurement is only allowed where the private party possesses intellectual property rights to the key approaches to the PPP, and where no reasonable alternative is available, among other reasons. Irrespective, direct procurement requires adherence to certain PPP Act procedures, including issuing a tender document and appointing an evaluation committee.
For PIPs, the PPP Act mandates that they must be subjected to due diligence to confirm that the private party is not corrupt, is not barred from PPPs in any other country, and is solvent. Additionally, PIPs are evaluated under the following four (4) criteria: public interest, project feasibility, the PPP suitability, and affordability. Under the public interest criteria, the views of the public may be sought through public participation.
Competitive bidding, another form of PPP, is more commonplace as it involves an invitation by the contracting authority of tenders, while restricted bidding is only undertaken where the following conditions have been met:
i. where, because of the complex or specialised nature of the work, contracting is restricted to prequalified tenderers;
ii. where the time to consider tenders would be disproportionate to the services;
iii. where there are few known suppliers of the services; and
iv. where an advertisement is placed on the contracting authority’s website regarding the decision to procure in this manner.
Cutting across all these procurement methods is the requirement to ensure that public participation is undertaken on a project. In Erick Okeyo -v- County Government of Kisumu & 2 Others, Petition No.1 “A” of 2014, the High Court - in considering the issue of public participation in tendering process vis PPPs - determined that the Constitution provides for citizen participation in policy formulation, planning and development; effective resources mobilisation and use for sustainable development; project identification, prioritisation, planning and implementation. Consequently, it determined that any policy decision by way of a PPP in which the citizens are not engaged in a meaningful way is constitutionally and legally indefensible.
While interpreting what amounts to effective public participation, the High Court in Robert N. Gakuru & Others v Governor Kiambu County & 3 others [2014] determined that public participation must be real and not illusory. To this end, it was held that for effective public participation to be said to have been undertaken, measures must be taken to facilitate the said public engagement over and above mere publication in government notices or media sites. Consequently, in PPPs, it is expected that the contracting authority must facilitate public engagement on the project over and above the ordinary notices in government gazettes. With respect to the JKIA Deal, this was not undertaken.
TAKE-AWAYS
As rightly identified by the African Development Bank in its PPP Strategic Framework 2021 - 2031, there are huge infrastructure gaps in African countries, especially in transport, electricity and water supply, which act as impediments to their economic growth. These gaps necessitated investment financing by the private sector to the tune of US$108 billion up until 2025. PPPs can offer a solution to increase investments and efficiencies in public infrastructure while ensuring meaningful returns, financially and socially, for impact investors on the continent.
However, lessons from Kenya show that effective public participation must be undertaken before any PPPs are considered and, therefore, contracting parties must find a way to work around confidentiality requirements in PPP agreements and input conditions precedent requiring the satisfactory completion of effective public participation that pass the muster of constitutional criticism.
Kipchirchir is an Associate and Wagacha is a Director | CDH Kenya
The ZIDA Advantage: How the Act and the Agency facilitate
mergers and acquisitions in Zimbabwe
THORTS
Tapiwa John Chivanga
Bureaucratic delays and regulatory uncertainty are a few examples of the challenges that hamper the completion of transactions in Zimbabwe. These hurdles are made lighter by the Zimbabwe Investment and Development Agency Act (Chapter 14:37) (the Act) and, more importantly, the Agency established under it. Whilst the Act provides the general framework for investments in the country, the Agency is tasked, among other things, with streamlining investment approvals and promoting investment in general.
This instalment, the second in a three-part series, puts into focus the Act and the Agency and expands on how these two are critical components in Zimbabwe’s mergers and acquisitions (M&A) landscape.
Tapiwa John Chivanga
In addition, the article will reveal how both can be invoked to serve as crucial enablers of M&A transactions. By understanding the advantages proffered by the Act and the Agency, foreign investors and local dealmakers can rely on them to facilitate deal execution, investor protection, and ensure regulatory compliance.
ZIDA: THE ENGINE OF INVESTMENT FACILITATION IN ZIMBABWE
The starting point for assessing how one can benefit from the Act and the Agency is to understand the Act. The Act came into force in February 2020, and it is a piece of legislation meant to provide for the promotion, entry, protection and facilitation of investment; to provide for the establishment of the Zimbabwe Investment and Development Agency, and to provide for matters incidental to or connected to the aforementioned.
Therefore, ZIDA is reference not only to the Act itself, but to the Agency which is created under it.
Benefits under the legislative framework
(a) Streamlining processes:
Before the introduction of the Act, Zimbabwe’s investment framework was fragmented across multiple statutes, naturally creating delays, regulatory uncertainty, and inefficiencies in the M&A process. The Act thus consolidated the since-repealed Zimbabwe Investment Authority Act [Chapter 14:30], the Special Economic Zones Act [Chapter 14:34] and the Joint Ventures Act [Chapter 22:22] into a single, investor- friendly law.
The Act also provides a simplified understanding of the investment licensing procedure for Public Private Partnerships and Special Economic Zones, while the underlying and supporting regulations also allow for the issuance of tax and customs related benefits applicable.
For M&A professionals and foreign investors, this is key to providing transaction guidance, and it also constitutes a streamlined legal framework that improves transaction certainty.
(b) The priority list:
This is the equivalent of ‘jumping the bureaucratic queue’ – legally. It is a ‘super power’ for companies dealing with government departments. Sadly, this super power is either not entirely known or it is severely underutilised.
The ability to jump the bureaucratic queue is found under section 6 of the Act. The provision states that, “Every officer, organ or arm of the State, and every statutory body and local authority whose duty it is to consider any application for the grant of any permit, licence, permission, concession or other authorisation required in connection with any activity, or for the provision of a service, shall ensure that, as far as possible, priority is given to the consideration of any application therefor by an applicant whose activity is permitted or approved in terms of an investment licence issued under this Act.”
Therefore, once a company is granted this license, most (if not all) processes must, as a matter of law, be given priority. Sensitising the authorities on this aspect may provide efficiency for any transaction or related applications.
(c) Clarity and legal protection for investors:
The Act incorporates globally accepted investment protection principles that are critical for foreign investors, including: the National Treatment Principle (NT), whereby foreign investors must be treated no less favourably than domestic investors in similar circumstances; the Most-Favoured Nation (MFN) Treatment, whereby any benefits granted to one foreign investor must be equally available to others; the Fair and Equitable Treatment principle, whereby investors are protected from arbitrary regulatory changes and unfair treatment; and protection against expropriation, whereby guarantees are offered against forced takeovers and state interference without adequate, prompt and effective compensation.
Further to the above, the Act also provides for repatriation of funds, and accords investors the right to challenge decisions affecting their investment through dispute resolution mechanisms.
By embedding these principles, the Act seeks to reduce policy uncertainty – a key concern for investors considering Zimbabwe. However, although these principles are reflective of the intention to provide more investor clarity, it should be noted that there is still massive policy inconsistency currently prevailing in Zimbabwe, especially in respect of currency laws in the country. It would be interesting to see investors pivot on this Act to challenge certain policies that affect investment in Zimbabwe.
Benefits from The Agency
As alluded to in the initial article, the Agency is one of the key regulatory bodies that govern M&A transactions in Zimbabwe, and it is essential to drive M&A efficiency. While the Act sets the legal framework, the Agency is the operational body that executes the law, ensuring that M&A transactions proceed smoothly.
ZIDA serves as the primary investment promotion authority, facilitating dealmaking by reducing bureaucratic delays, offering post-investment support, and creating a more predictable regulatory environment. This is primarily done through its One-Stop Investment Services Centre (OSISC). A key obstacle to efficient deal execution in Zimbabwe has been the need to navigate multiple government departments for approvals. The OSISC integrates approvals from all the key regulatory bodies stated in the initial article.
In practice, the Agency also meets up with investors and key stakeholders, upon request, to cater to any investor issues, including any bottlenecks that may arise during subsequent transactions. By bringing these agencies under one coordinated platform, OSISC cuts approval timelines, eliminates redundant processes, and improves regulatory transparency, all essential for fast-tracking M&A transactions.
Unlike traditional regulators that focus solely on approvals, ZIDA provides ongoing support to investors and ensures that their business needs, from a regulatory perspective, are catered for. More recently, in 2024, ZIDA suspended its yearly licensing maintenance fee of approximately US$3,000, rightfully pointing out that the fee actually deterred investment and unnecessarily penalised investors. It also provides for regulatory updates, helping investors stay compliant with evolving policies, and even goes further by making available investment opportunities in different economic sectors in the country.
As Zimbabwe continues to refine its investment climate, the Agency and the Act are both critical components in the M&A landscape. Together, they create a structured, investor-friendly environment for M&A transactions. For investors and M&A professionals, understanding ‘the ZIDA advantage’ is not just advantageous – it is essential. By fully acquainting oneself with the elements provided by the Act and the Agency, one can ensure a more seamless transactional experience for investors in Zimbabwe.
Chivanga is a Partner | Scanlen & Holderness
THORTS
Logistical challenges and solutions in African e-commerce
Konrad Fleischauer and Bhargav Desai
THE STATE OF E-COMMERCE AND THE DEMAND FOR LOGISTICS SOLUTIONS
The e-commerce sector in Africa is experiencing remarkable growth, driven by a youthful, tech-savvy population and rapidly expanding internet penetration. The International Trade Administration (ITA) expects the number of online shoppers in Africa to reach 520 million by 2025, a 56% increase from the 334 million reported in 2021, with revenues projected to surpass US$46 billion by 2025. (1)
Despite this promising trajectory, logistics remain a significant barrier due to underdeveloped infrastructure and high operational costs. Addressing these challenges is critical for sustaining and scaling Africa’s e-commerce growth story. The purpose of this article is twofold, namely (i) to touch on several logistical challenges currently being experienced by African e-commerce companies, and (ii) to highlight a number of solutions and initiatives undertaken to address such logistical challenges.
LOGISTICAL CHALLENGES
Africa is witnessing a digital transformation in retail, with countries like Nigeria, South Africa and Kenya at the forefront. In Nigeria alone, e-commerce contributes around 10% of all retail sales, (2) largely propelled by platforms like Jumia, which reported 30 million unique visits per month in 2023, (3) compared to 10 million visits on Takealot in South Africa.(4) However, rural and peri-urban areas, home to a majority of the population, often remain underserved due to poor logistics infrastructure.
Konrad Fleischauer
Bhargav Desai
According to the ITA, cross-border e-commerce accounts for a growing share of total online transactions, highlighting the need for seamless regional logistics networks. Unfortunately, the average cost of transporting goods in sub-Saharan Africa is 50% to 75% higher than in other developing regions globally, making last-mile delivery a persistent challenge.(5)
Poor road networks result in extended delivery times, while fragmented regulatory environments complicate cross-border trade. For instance, across the continent, only 43% of roads are tarred; 30% of these paved roads are located in South Africa. (6) This deficit in paved roads has been detrimental to building a modern economy as 80% of goods are transported by road. (7) Additional limitations include customs clearance, which can take up to 30% longer in Africa compared to the global average, (8) and warehousing capacity, which remains limited, with an average of only one square meter of storage per capita being available in Africa, compared to three square meters in Asia.(9)
Postal services in most African countries are extremely limited or non-existent, hamstringing e-commerce operations. According to the World Bank, South African container ports rank among the most inefficient, owing to infrastructure gaps, with port operator Transnet seeing its losses top US$381 million in 2023,(10) and port and rail failures estimated to be costing the South African economy up to US$19 billion a year. (11)
In addition to the above, currency exchange risks, inconsistent tariffs, and inefficient customs procedures also remain barriers for effective e-commerce in Africa.
Nonetheless, these challenges present opportunities for investment. The African Continental Free Trade Agreement (AfCFTA), which aims to create a single market for goods and services across 54 African countries, could significantly enhance regional trade logistics. By 2030, AfCFTA is expected to boost intra- African trade by 52%, underscoring the importance of harmonised logistics systems.(12)
INNOVATION, INVESTMENT TRENDS AND SOLUTIONS
Innovative solutions are emerging. Blockchain technology, for instance, is being piloted to streamline customs processes and improve transparency. Similarly, digital payment systems like M-Pesa in Kenya and MTN Mobile Money in various West African countries have become household names. These platforms allow users to store, send and receive money using mobile phones, offering a convenient alternative to traditional banking, especially in regions with limited banking infrastructure, fostering financial inclusion. These systems have reduced transaction barriers, facilitating smoother cross-border trade.
African countries are still behind global retail banking habit averages, with almost half of African adults not in possession of any formal bank account. In terms of saturation, Kenya leads the African continent with 88% of its population having bank accounts, followed by South Africa (82%), Nigeria (51%), Morocco (42%), and Egypt (38%).
The result is that debit card payment methods only represented 10% of transactions in 2021, while credit card ownership rates are low, at an average 2% for the entire continent.(13) Therefore, online payments remain a perennial challenge for businesses wishing to target e-commerce consumers in African markets.
To address some of the challenges discussed above, and other logistical barriers, significant strides are being made in logistics innovation. For instance:
Drone technology: Startups like Zipline have deployed drones to deliver medical supplies in rural Rwanda, showcasing the potential for such technologies in broader e-commerce applications.
Warehousing expansion: Investments in urban fulfilment centres, such as DHL’s multimillion-dollar hubs in Lagos and Nairobi, are enhancing storage and distribution efficiency.
AI and data analytics: Companies are leveraging AI to optimise delivery routes, reducing costs and transit times. For example, Jumia’s logistics network uses data-driven tools to handle over 20 million packages annually.(14)
Funding: The African Development Bank has allocated US$10 billion to transport infrastructure projects between 2020 and 2030, aiming to improve road networks critical for e-commerce logistics in Africa. (15)
Partnering with global shipping firms: Cross-border trade is a vital requirement for growth for e-commerce in Africa. Platforms like Konga and MallforAfrica have expanded their reach by partnering with global shipping firms, enabling African products to access international markets.
SCALING E-COMMERCE THROUGH LOGISTICS TRANSFORMATION
Africa’s e-commerce sector is poised for significant growth, but its potential hinges on resolving logistics challenges. Investments in infrastructure, adoption of advanced technologies, and regional policy harmonisation are crucial. With over 60% of Africa’s population under 25 years old16 and mobile internet penetration expected to reach 68% by 2025,(17) the continent’s digital economy is set for a bright future. By solving the logistics puzzle, Africa can unlock the full potential of its e-commerce market and drive broader economic development.
Given the challenges and the innovative solutions being developed, there are significant infrastructure opportunities in this space. To facilitate easier access to capital for institutions in this sector, focused efforts are essential. PSG Capital has extensive experience in supporting capital-raising initiatives, aiding the growth and development of companies and logistics industries across Africa.
1 - https://www.trade.gov/rise-ecommerce-africa
2 - https://www.dw.com/en/africa-sees-rise-in-e-commerce-digital-marketplace
3 - https://www.dw.com/en/africa-sees-rise-in-e-commerce-digital-marketplace
4 - https://www.dw.com/en/africa-sees-rise-in-e-commerce-digital-marketplace
5 - https://www.trade.gov/rise-ecommerce-africa
6 - https://www.cgdev.org/project/designing-roads-africas-future
7- https://www.cgdev.org/project/designing-roads-africas-future
8 - https://www.dw.com/en/africa-sees-rise-in-e-commerce-digital-marketplace
9 - https://www.dw.com/en/africa-sees-rise-in-e-commerce-digital-marketplace
10 - https://www.transnet.net/InvestorRelations/Pages/Annual-Results-2024.aspx
11 - https://www.africanews.com/capacity-gaps-slow-competitiveness-of-south-africasports-business-africa
13 - https://www.trade.gov/rise-ecommerce-africa
14 - https://rwandatechnews.com/zipline-revolutionising-healthcare-logistics-in-rwanda/
15 - https://ssir.org/articles/entry/zipline-health-innovations-africa
16 - https://www.logupdateafrica.com/e-commerce/e-commerce-logistics-africas-growth-frontier
17 - https://www.logupdateafrica.com/e-commerce/e-commerce-logistics-africas-growth-frontier
Fleischhauer and Desai are Corporate Financiers | PSG Capital
Legal tech in M&A transactions: Empowering deal-making in Africa
THORTS
Tevin Ramalu and Lemont Shondlani
Mergers and acquisitions (M&A) in Africa have traditionally presented complex challenges, including intricate regulatory landscapes, extensive due diligence requirements, and the need to navigate diverse legal systems. For foreign investors seeking opportunities within Africa’s expanding markets, these complexities have often resulted in increased costs, prolonged timelines, and heightened risks. However, the advent of legal technology is transforming M&A transactions across the continent, introducing efficiencies that mitigate these challenges and foster a more streamlined deal-making process.
From due diligence to post-transaction integration, legal technology is revolutionising core stages of M&A transactions, offering tools that enhance accuracy, reduce human error, and improve decision-making for stakeholders.
REVOLUTIONISING DUE DILIGENCE
Due diligence is one of the most critical phases of any M&A transaction, providing the foundation for informed decision-making. Historically, legal teams would manually review extensive documentation over several weeks or months, a time-consuming process susceptible to human error. Today, artificial intelligence (AI)-powered tools, employed by leading law firms such as DLA Piper, are automating this process with remarkable efficiency.
Tevin Ramalu
Lemont Shondlani
These tools leverage machine learning algorithms to review voluminous datasets, identify risks, and highlight key information in a fraction of the time required for manual analysis. By automating repetitive tasks, these technologies ensure comprehensive and accurate due diligence, enabling foreign investors to better assess potential risks and opportunities. This is particularly advantageous in Africa, where access to reliable data can be inconsistent.
STREAMLINING CONTRACT NEGOTIATION AND REVIEW
Contract negotiation and review are central to M&A transactions, which require meticulous scrutiny to ensure alignment with legal requirements and the interests of all parties. Legal technology now plays a pivotal role in this area, utilising AI-driven tools to analyse contracts, identify critical clauses, and detect discrepancies or risks.
These platforms not only expedite the contract review process but also assist legal professionals by suggesting edits and ensuring compliance with local laws and regulations. In Africa’s diverse legal environment, such tools are invaluable for tailoring contracts to address jurisdiction-specific challenges. Consequently, investors can approach transactions with greater confidence, knowing that agreements are both legally sound and strategically advantageous.
OPTIMISING DEAL STRUCTURING AND INTEGRATION
The structuring of M&A transactions often involves balancing complex considerations, including regulatory compliance, financial implications, and strategic goals. Legal technology facilitates this process through predictive analytics and data-driven insights, allowing negotiators to evaluate various deal structures and simulate potential outcomes.
For transactions within Africa, where regulatory requirements can vary significantly between jurisdictions, these tools are instrumental in ensuring compliance and reducing the risk of post-transaction complications. Furthermore, legal technology supports post-deal integration by managing data, streamlining communication, and providing project tracking capabilities, thereby enhancing operational efficiency and long-term success.
ETHICAL CONSIDERATIONS AND EMERGING RISKS
While legal technology offers significant benefits, it raises ethical concerns, particularly around data privacy and AI reliability. AI tools rely on vast datasets, often containing sensitive financial and personal information, increasing the risk of data breaches. In Africa, where data protection laws are still evolving, companies must ensure compliance with local and international standards.
The reliability of AI-generated outputs depends on the quality of training data. Biases or inaccuracies can lead to misleading results, as seen in Mavundla v MEC: Department of Co-Operative Government and Traditional Affairs KwaZulu-Natal and Others (2025). In this case, a law firm faced scrutiny for citing fictitious case law, potentially AI-generated. The court dismissed the appeal after finding most references were non-existent, highlighting the need for rigorous oversight.
AI also has financial and environmental costs. Training large models requires vast computational resources, contributing to carbon emissions. The recent release of DeepSeek by China has intensified market competition, raising concerns about AI’s sustainability. Legal professionals must balance AI’s efficiencies with its ethical and environmental risks, ensuring it enhances rather than undermines legal integrity.
THE REGULATORY LANDSCAPE FOR AI IN AFRICA
As the adoption of AI accelerates, several African countries are developing frameworks to regulate its use. While no jurisdiction has enacted AI-specific legislation as of January 2025, notable advancements have been made:
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Egypt: Released the Second Edition of its National Artificial Intelligence Strategy 2025–2030 in January 2025.
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Ghana: Published the National Artificial Intelligence Strategy 2023–2033 in October 2022.
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Kenya: Unveiled the Kenya National Artificial Intelligence Strategy 2025–2030 in January 2025.
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Nigeria: Introduced a draft National Artificial Intelligence Strategy in August 2024.
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South Africa: Released the National Artificial Intelligence Policy Framework in August 2024, emphasising ethical AI use, personal information protection, and enhanced government efficiency.
These initiatives reflect a growing recognition of AI’s transformative potential, coupled with the necessity of safeguarding ethical standards and data privacy.
The integration of legal technology into M&A transactions is reshaping the African deal-making landscape, offering tools that enhance efficiency, reduce risks, and ensure more successful outcomes. By automating labor-intensive processes such as due diligence, matter management, and contract review, and by providing actionable insights for deal structuring and post-transaction integration, legal technology is enabling investors and legal professionals to navigate the complexities of African markets with greater confidence.
Nevertheless, the adoption of these technologies must be approached with caution. The Mavundla case serves as a stark reminder of the potential pitfalls of uncritical reliance on AI, underscoring the need for human oversight and ethical diligence. As Africa continues to refine its regulatory frameworks for AI, legal practitioners must strike a balance between embracing innovation and safeguarding the principles of accountability and professionalism that underpin the legal profession.
Ramalu is an Associate Designate and Shondlani a Candidate Legal Practitioner in the Corporate Department. Supervised by Amy Eliason, a Director | DLA Piper Advisory Services