Investors update: African GDP growth to edge up in 2023 despite South Africa slide

African GDP growth to edge up in 2023 despite South Africa slide

Highlights

• Africa’s economic growth is set to edge upwards in 2023 and 2024 amid tighter global monetary policy and the fallout from Russia’s invasion of Ukraine, but South Africa’s will plummet.
• The continent’s GDP growth is projected to rise to 4% this year and 4.3% in 2024 after a 3.8% expansion last year, the African Development Bank (AfDB) said in its annual African Economic Outlook.
• However, GDP growth was still some way below the 4.8% expansion in 2021 while AfDB President Akinwumi Adesina called for “cautious optimism”.

Source: AfDB

Our Takeaway

Growth in the continent’s southern region is projected to slow sharply to 1.6% this year from 2.7% last year, dragged down by poor economic performance in South Africa, where scheduled power cuts of up to 10 hours a day have stymied the economy. In a sharp downward revision, the AfDB now forecasts the continent’s most industrialized economy to grow by only 0.2% in 2023 and 1.5% next year. Average African inflation is set to accelerate again this year to 15.1%, from 14.2% in 2022, the report said.

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Kunda Kids secures $700k to teach African history in the diaspora

Highlights

• London-based edtech and media publishing company Kunda Kids has raised $700,000 to double down on its mission to teach African history to kids in the diaspora.
• The seed round was led by Zrosk Investment Management with participation from Voltron Capital, Argentil Capital, HoaQ, Kaleo Ventures, together with some angel investors.
• The company claims to have sold over 25,000 books to date, and the Kunda Kids app has been downloaded in over 130 countries.

Source: BenjaminDada

Our Takeaway

Globally, the African diaspora is spread out across several countries. An estimated 36 million Africans live outside the country of their birth, with just over 50% residing within the continent. The sheer size of the African Diaspora means there’s a large potential market for African cultural items outside the continent. And this is an opportunity for startups like Kunda Kids. The market opportunity for Kunda is even larger given only 7% of all children’s books published in the UK between 2017 and 2019 contained characters from minority ethnic groups, including those of African descent, reflecting an obvious need to increase diversity in the nation’s literature.

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FSD Africa Investments backs Africa Climate Ventures with $1.2m

Highlights

• FSD Africa Investments (FSDAi) has invested $1.2 million in Africa Climate Ventures (ACV), a venture builder working to build a $45 million portfolio. 
• ACV aims to catalyze the carbon asset class in Africa by building innovative businesses focused on solving our generation’s greatest challenge and at the same time capturing a significant share of global carbon markets in Africa.
• The venture represents a series of “firsts” in Africa: from its entirely Africa-based founder team and its permanent capital structure based in Kigali to its exclusive focus on carbon mitigation, capture, and removal, the continent’s fastest evolving sector.

Source: ABC

Our Takeaway

The benefits of increasing climate-focused funds targeting Africa are profound. Per a UN report, Africa will need between $50 and $100 billion annually by 2050 to adapt to the effects of climate change, such as droughts and floods, which can have devastating impacts on lives and economies. Supporting innovative startups and entrepreneurs who are working on climate solutions can drive technological advancements and help build resilient and sustainable communities while also leading to the creation of sustainable jobs and new industries, boosting economic growth and reducing poverty.