TLDR:
- Africa has seen a shift towards green investment, with green deals representing almost half of all venture-capital activity on the continent.
- Despite challenges like currency devaluations and high inflation, the industry is adapting with startup founders making tough choices for efficiency.
According to an article in The Economist, Africa has experienced a noticeable increase in green investment over the past few years. While there has been a global slowdown in venture-capital funding, this trend has been less pronounced in Africa. In 2022, total deal value peaked at $6.5 billion and in 2023 fell to $4.5 billion, showing resilience in the face of challenging economic conditions.
Although the continent still faces obstacles such as currency devaluations and high inflation in certain countries, there is also positive news within the industry. Startup founders are being pushed to make difficult decisions to enhance efficiency, including consolidating with competitors and reducing costs to achieve profitability targets more quickly. This adaptability and agility in the face of financial constraints have led to an improvement in funds raised by startups, with July being the best month in over a year.
This shift towards green investment in Africa is a promising sign for the continent’s economic development and sustainability efforts. Despite the challenges, the industry’s ability to adapt and innovate bodes well for future growth in the region.
