⚡ Bitcoin is back

Coming off its third month of gains, the world’s largest cryptocurrency surged past $42,000 on Monday to trade at its highest since April 2022.

Author

Anthony Miclet
December 06, 2023

Good morning and happy December!

As 2023 winds down, Kenyan startups already have something to look forward to in the new year after President William Ruto revealed they will start getting tax breaks from April 2024 under the new Startup Bill. 

While the jury is still out on how the provision will be implemented, the move is the latest in a string of impressive efforts by African governments to support their respective tech ecosystems. 

On today’s agenda:

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Crypto rally

Bitcoin tops $42k as crypto market rallies on ETF anticipation

Bitcoin’s price has been toying with the $40,000 level recently. Finally, it breached it Monday to trade above $42,000, pushing the market capitalization of all cryptocurrencies over $1.5 trillion for the first since May 2022. 

In recent weeks, riskier investments and interest-rate-sensitive assets, including gold, have seen substantial rallies. Gold hit a record high and Ether moved past $2,200 as bets on lower interest rates and spot bitcoin ETF anticipation helped the crypto rally.

Oil prices fell for another week and dipped further on Monday on concern about a drop in demand and on continued uncertainty about the depth and duration of OPEC+ supply cuts. In Africa, equities were mixed.

Downward revision

AfDB cuts Africa’s growth forecasts amid global uncertainty

The African Development Bank (AfDB) has revised its short to medium-term growth projections for Africa in 2023 and 2024, lowering them to 3.4% and 3.8% from the initial estimates of 4.0% and 4.3%. 

This is due to the persistent impacts of Covid-19, geopolitical tensions, conflicts, climate shocks, a global economic slowdown, and the limited fiscal capacity of governments to respond to shocks and sustain post-pandemic economic recovery.

In addition, Africa continues to grapple with persistent inflation despite a global decline in inflationary pressures, with consumer prices projected to average 18.5% and 17.1% in 2023 and 2024, respectively.

Alt energy

More African homes, businesses powered by off-grid solutions

A growing number of homes and businesses in Africa adopting off-grid solutions for their energy needs, a factor that was previously overlooked in earlier assessments of electricity access on the continent. 

That’s according to the latest World Energy Outlook report, which highlights a notable increase in the use of solar power by households and businesses worldwide.

Earlier this year, the Africa Solar Outlook report noted that around 1 GW of new solar capacity was installed on the continent over the previous year. This surge in solar installations underscores the continent's considerable solar power potential.

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Our insight for the week

Get more context into events shaping Africa’s economic landscape.

Cleantech is driving a rebound in FDI flows to Africa: Data from the latest EY Africa Attractiveness Report indicates a significant rebound in foreign direct investment (FDI) into Africa in 2022.

And perhaps surprisingly, the cleantech sector emerging as a primary driver of these investments. 

Africa is seeing a surge in cleantech FDI due to a growing "green revolution," particularly in the development of renewable energy infrastructure. 

But these clean energy investments are concentrated in a limited number of countries, namely South Africa, Egypt, Morocco, and Kenya.

Collectively, they have received about 75% of all renewable energy investments since 2010, totaling $46 billion. 

CleanTech has become the leading FDI sector in Africa.

Despite these investments, there is still a substantial shortage of clean energy, as fossil fuels continue to dominate Africa's power generation. 

Estimates from the International Renewable Energy Agency (IRENA) and the African Development Bank (AfDB) show that the continent has significant untapped potential, including 7,900GW in solar PV, 1,753GW in hydropower, and 461GW in wind energy.

Investors realize this and are increasingly backing founders working to tap this potential.

Over the past 12-18 months, several VC firms—among them big names Satgana, Catalyst Fund, Equator, and Nigeria-based EchoVC—have introduced funds to support startups in Africa's climate sector (including cleantech). 

In our next edition of Pulse54, we will delve into the cleantech sector in Africa, exploring the opportunity and active players—VCs and startups—in the space.

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