by 
(first published Oct 28, 2019)
History always has a karmic effect on those who fail to learn from past mistakes. Thankfully Africa has learned. After missing out on the third industrial revolution, another revolution is now upon us and Africa has been grabbing it by the blockchain horns.
Indeed the fourth industrial revolution was ushered in by the disruptive, still nascent technology that is the blockchain. What a time to be alive. Away from the hype, many of which have been exaggerated or grossly misinterpreted, blockchain indeed has the capacity to disrupt many industries with its poster child use case, cryptocurrency, boasting such advantages as decentralization ( lack of central authority), tamper proof transactions, security and perceived anonymity. Africa needs blockchain technology and cryptocurrencies more than any part of the world and it couldn’t have come at a more auspicious time for the continent. Africa knows that too and a quick Google trend research will reveal as much. Africa dominates cryptocurrency and bitcoin search results with eye-popping figures with Nigeria, South Africa and Ghana all ranking in the top 10.
This should not surprise anyone and it is no coincidence that African countries have the highest hyperinflation in recent memory — South Sudan, Nigeria, Egypt, Ghana, Sudan, Malawi, Mozambique, Zambia and Zimbabwe have all recorded double figures or more in inflation rate. For decades Africans have lamented their dysfunctional economic situation as corrupt government and traditional financial institutions continue to fleece citizens through inaccessible payment systems, high transaction cost and other poor banking infrastructures all of which have hampered the spread of banking services across Africa and has left an overwhelming 66% majority of Sub Saharan Africa still unbanked. All of these make it top priority for an alternative currency to challenge the status quo of fiat currencies in Africa.
Cryptocurrency To The Rescue
Cryptocurrency and blockchain have been making inroads across Africa, promising to fix some of its niggling economic problems and many African countries have recognized the opportunities inherent in this technology. Cryptocurrency will help accelerate the financial inclusion of Africa’s unbanked while providing an escape route from hyperinflation. Not to mention it will help boost cross-border payments for over 15 million Africans working abroad. Also factor in other benefits like employment opportunities and simple payment of utilities, and it clearly reveals Africa’s economies can only grow to Olympus heights if cryptocurrency is adopted. Figures show that the adoption rate of cryptocurrencies in European countries with less volatile economies is slow when compared to Africa where cryptocurrencies are viewed as a much needed respite from traditional banking institutions and its attendant problems. Considering the conservative estimate that there will be over half a billion mobile phone subscribers in Africa by 2020, it means more Africans now have the tools to experience cryptocurrency in all of its blockchain glory. The fact that many countries are gradually transitioning into cashless societies also makes it the best time for Africa to take that huge stride towards crypto adoption.
But the rise of cryptocurrency in Africa is not all sunshine and rainbows; there are still a number of hurdles to be crossed if Africa is to reach its full potential. For one thing, anyone who thinks that African governments and its traditional banking industry will take the news of the emergence of cryptocurrency lying down has another think coming. As many as 7 countries have cryptocurrencies banned outright while 10 countries are yet to take an official stance on it let alone formulate laws and policies that’ll enhance its growth. But all their efforts to clampdown cryptocurrencies have only yielded a Streisand effect as public interest continues to soar so much so that ironically the central banks of some African countries are now considering launching their own. The National Bank of Rwanda (NBR) is a case in point. Other factors impeding the adoption of cryptocurrency in Africa include complicated signup processes as new users are forced to jump through hoops to verify their accounts; the many recent reports of fraudulent bitcoin schemes is a sticking point dissuading cryptocurrency use; and considerably low crypto awareness in many nations. Even as African countries dominate crypto search results, interest is predominantly limited to trading activities on exchanges. There’s more. Cryptocurrency has been unable to loosen the hegemonic hold of the mobile money industry and its many perks including convenience (no internet? no problem), simplicity (no smartphone? no problem) and efficiency that has drawn millions of Africans to it making the continent of 1.3 billion people (6.7% of the total world population) home to nearly 50 percent of the world’s mobile money. At this rate cryptocurrencies should probably integrate with mobile banking platforms. And let’s not forget the problems of scalability, transaction speed, interoperability of different ledgers, data privacy and network security, all of which presents a new set of formidable roadblocks preventing cryptocurrency growth and adoption in Africa.
The Future
Even with all of these problems the future is bright still. African startups have been leveraging blockchain technology into making secure and transparent payment solutions. Cryptocurrency’s battle for dominance will not only help central banks on the continent improve and reform but it’s also advantageous for the crypto space and will help catalyze new ideas and innovations. Exchanges in Africa are now factoring in the unique complexities of the African market and creating products to address the problems of lax governance, systemic volatility and insecurity that is associated with African fiat currencies. Take for example the newly established KuBiTX (exchange platform and mobile payment services) with its campaign for crypto adoption by raising awareness through crypto education as well as other products tailored for the African community which will go a long way to further enhance the growth of the cryptospace. This is just one of many growing cryptocurrency startups domiciled in Africa who are setting the stage to ensure that cryptocurrency use blossom on the continent to the point it becomes part of everyday living. Africa is set to take centre stage in digital currencies and transactions. Let the Africa Crypto Revolution begin.
