The Best Use Case for Blockchain and Crypto Adoption in Africa
For us in Africa the growth of Cryptocurrency and Blockchain should get us excited.
Our excitement should stem for the fact that cryptocurrency and the blockchain is opening a window of access into global trade and commerce. The challenges in Africa when it comes to trade have been reiterated many times. Access to capital being a major hurdle for entrepreneurs.
The inefficiencies in our financial systems also leaves a lot to be desired. Cryptocurrency resolves these challenges.
· From facilitating cross boarder payments
· To improving peer to peer lending
· And facilitating business processes.
The possibilities are endless and the use cases are just as exciting.
But as a realist, I try not to get ahead of myself and consider the practical beginner steps that must be implemented to grow Blockchain adoption and the Crypto ecosystem in Africa.
The most important use-case I believe starts with creating value added services for mobile in terms of payments. Mobile adoption on the continent is growing tremendously. Ghana is one of Africa’s largest mobile markets, with about 34.57 million subscribers and a penetration rate of 119%. Penetration rate is expected to hit 130% by 2020 according to Jumia an African online retailing giant.
As an ecosystem, we can start with simple value added services such as getting access to call credit and airtime.
Payments via mobile phone popularly called “Mobile money” is one of the vertical industries that has seen a fast adoption rate. This presents another important use case for the crypto ecosystem. The growth of mobile money transaction has made mobile telecom network operators highly liquid. Ghana is the fastest-growing mobile money market in Africa.
It has been speculated that in a few years, the high patronage of mobile money will make Telcos highly capitalized enough to takeover banks.
The underlying reason for the increased use case for mobile payment system is the convenience it comes with. People are looking for ways to cut time waste spent in banking halls in order to free up time for other equally important things. Spending 19 minutes and beyond on a single transaction is inefficient and requires disruption.
Then there is the challenge of access to banking for people in peri-urban and rural areas. Hence the development of mobile payment products has been a great relieve to people in areas where access to banking is limited.
African economies are still very cash heavy and cash is a preferred form of payment for many business owners. Mobile money adoption is gradually changing that. Currently the development of mobile money systems are limited to
Payment and Receipt of cash (Limited within national Boundaries)
Payment of bills
Accessing loans.
Bank to Mobile transactions.
What the Blockchain and crypto ecosystem brings to the table is the ability to do all of the above and the following
The ability to make cross-border payments and transactions at minimal fee
Peer to Peer Lending (Collateral Free access to credit)
The ability to invest globally in burgeoning business ideas.
The creation of more job opportunities to fill the 200 million job deficit that Africa faces. The ability to sell products and services to a wider market hence more business growth and job expansion.
The ability to create various streams of income for young people looking for opportunities. Crypto presents a real opportunity to make a difference on the continent and adapting it for mobile payments patterns is the way to go.
