We noted with interest the FT's recent comment piece highlighting the need for job creation in Africa, and the role that private equity (PE) can play in generating employment. Over the past eight years, AVCA has been tracking the employment impact generated by PE firms in Africa.
Our inaugural Africa Sustainability Study found that African portfolio companies had created an average 15% increase in jobs since receiving PE investment. This year, our second study - informed by data from over 231 companies representing a quarter of all PE-backed companies in Africa over the period – showed a 17% increase, with 91% of those jobs being permanent.
AVCA believes that the African private equity industry should be blazing a trail for job creation. However, we need to look beyond numbers of jobs created and focus on the type and quality of those jobs. Private equity can have a significant impact on gender diversity, which is crucial to driving development.
Our data shows that of the new jobs created by PE-backed companies in 2016, only 33% were held by female employees, leaving much more to be done in addressing the gender gap and helping to mobilise long-term capital. We will be working with our members to prioritise this and reporting back in 2018.
Michelle Kathryn Essomé
Chief Executive Officer
African Private Equity and Venture Capital Association