In the first half of 2008, U.S. private equity firms saw a decline in fund-raising activity for the first time since 2003, while emerging-market private equity funds maintained their strong performance. Private equity funds focused on emerging markets raised US$35.3 billion, a 68 percent increase compared to the same period in 2007. One of the strongest areas of growth came from Africa, where private equity funds grew by 113 percent and raised US$1.2 billion. There was a prevalent view among investors that Africa would be immune to the volatility in the U.S. market and that growth would continue--until the financial crisis hit.

As the U.S. credit crunch transformed into a global financial crisis, and most likely into a global economic crisis, many began to question Africa's resilience in the face of a global downturn. While the S&P 500 lost 33 percent of its value by the end of October compared to the beginning of 2008, shares listed on the Johannesburg Stock Exchange in South Africa declined 28 percent. During the same period, the Kenyan Stock Exchange and the Nigerian Stock Exchange lost 35 percent and 38 percent of their value, respectively. While African markets performed better compared to those in the BRIC countries, which declined by 41 to 70 percent, the long-held view of Africa's low correlation to the rest of the markets does not seem to hold in periods of crisis.