Africa’s tech sector is set for massive growth with regards to merger and acquisition (M&A) activity this year.

M&A in the technology and telecommunication sectors in Africa and the Middle East will grow by more than four-fold in 2018, according to the Baker McKenzie Global Transaction Forecast.

The research, which was developed in association with Oxford Economics, points to growth in the African and Middle East markets, with M&A activity valued at $1.2 billion in 2017.

The report suggests that the amount will surge to $5.9 billion in 2018, with a further $5.9 billion expected in 2019.

Factors responsible for the expected mergers and acquisition growth in Africa include a more positive global economy, tech expansion across numerous industries, and investment from emerging markets, according to ITNewsAfrica.

African merger and acquisition activity expected to grow

The report from Baker McKenzie reveals that merger and acquisition deals across the globe will experience growth over the coming years.

Darryl Bernstein, head of the technology, media and telecommunications practice at Baker McKenzie in South Africa, gave further insight regarding the findings of the research report from an African perspective.

“Africa’s growing telecoms infrastructure and access to online services and platforms continue to improve access to the online economy,” Bernstein said, according to Businesstech.

“Increased local demand for innovative products, services and solutions drives offshore telecommunications and technology companies to target opportunities in Africa. The growing financial services sector has also seen domestic banks make significant investments in technology to advance their innovation agenda,” he said.

“African tech companies are also targeting offshore investments in companies that will deepen their access to new technologies, markets and talent,” Bernstein added.

“The expansion of emerging technologies across industries, including agribusiness, automotive and of course fintech, will also drive M&A activity as we expect to see more cross-sector deals involving technology,” he said.