Confi Africa Insight
By Ehis Omozusi on The Capital
Few facts about the African market:
Africa is the second most populous continent with 1.1 billion people, 16% of the world’s population. Over 50% of the African population are under the age of 25, this makes the continent a very interesting one for new technologies and blockchain innovations. The continent has approximately 30% of the earth’s remaining natural resources,the continent has the largest reserves of precious metals with over 40% of the gold reserves, over 60% of the cobalt, and 90% of the platinum reserves. Nigeria is the fourth largest oil exporter in the world, and Africa’s biggest oil producer with about 2.2 million barrels produced every day. China is Africa’s top trade partner with Sino-Africa trade volume nearing $200 billion. According to National geography blog Africa as at 2013, over 1 million Chinese citizens are on the African continent. 525,148,631 Africans are estimated to have access to the internet by June 30th 2019, according to a report from internet world stats. Internet penetration rate was at 39.8%. Africa accounts for 11.9% of the entire world’s internet users.
Blockchain in Africa: The difference between cryptocurrency and, Visa or Mastercard, is that a cryptocurrency is not now regulated by the government and doesn’t need middlemen, and transactions rely on the internet, which means they can happen anywhere in the world. Africa is rarely mentioned among the largest markets for cryptocurrency, but it may be set to steal a march over other market, as citizens of countries battling high inflation are likely to opt for cryptocurrency, because “with their paradigm of decentralization, cryptocurrencies offer an alternative to disastrous central bank policies. A large number of African countries have double-digit inflation rates, these countries include Egypt, Ghana, Malawi, Mozambique, Nigeria, Zambia and Zimbabwe. It is no surprise that some of these countries are among the main Bitcoin economies in Africa. The main Bitcoin countries are Kenya, Nigeria, South Africa and Zimbabwe.
When Zimbabwe’s inflation skyrocketed in 2015, forcing authorities to print $100 trillion notes (each worth just $40), some Zimbabweans turned to Bitcoin. Zimbabweans and citizens of other African countries transact in Bitcoin “as opposed to their local currencies, which are plagued with hyperinflation. There will be 725 million mobile phone subscribers in Africa by 2020, according to the GSM Association, which represents the interests of mobile operators globally. That means more Africans will have the tools to plug into the cryptocurrency ecosystem.
Blockchain laws rules and regulations in Africa: Like every other part of the world, the regulatory system for the cryptocurrency ecosystem in Africa is yet to be established. Some countries are indifferent, while some clamp down completely about the idea, some others like South Africa have had a favorable regulatory system. The South Africa Reserve Bank (SARB) released a “ Consultation Paper on Policy Proposal for Crypto Assets’ ‘ in January 2019 that had favorable guidelines and recommendations for digital currencies. The SARB consultation paper also suggested that the cryptocurrency-related businesses should register with the country’s Financial Intelligence Centre, this move has the potential of increasing the adaptation of likes of Bitcoin by taking care of risk-related factors. This makes it clear that South Africa will move in a cautious but progressive manner to regulate cryptocurrency and Bitcoin, this would further help in an adaptation boost for cryptocurrency in the country.
Nigeria’s economy: The economy of Nigeria is a middle-income, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology, and entertainment sectors. It is ranked as the 27th-largest economy in the world in terms of nominal GDP, and the 22nd-largest in terms of purchasing power parity.
- Major source of revenue: Oil, and other natural resources and Agriculture,
- Population of almost 200 million people as of 2018
Blockchain Adaptation in Nigeria
According to data from local bitcoins, Nigeria came second in the world’s peer-to-peer bitcoin transaction in 2017, accounting for 6%of the global bitcoin trade. Despite a directive from the central bank of Nigeria stating its lack of support on virtual currency transactions, the value of peer-to-peer transactions in Bitcoin rose to around 1500% in the second half of 2017.
Acceptability
The rise in peer to peer bitcoin payments in Africa in the last year has led a lot of merchants accepting the digital currency in various countries in the continent, as a means of payment. The low transaction fee and the remittance speed also encourages adaptation. Few merchants that accept bitcoin include Minku, GSM2ME, Shopnow, Bitsika. In light of this ConfluxNetwork has partnered with Fliqpay; a Nigerian cryptocurrency payment gateway. This partnership will serve as a bridge for seamless remittance between China-Africa market one, which has been on for long and has kept growing strong. This partnership will help Chinese factories receive payment from any African company or individual and vice versa. Conflux and Fliqpay have also built a partnership with Makoko Dream foundation to provide foodstuff to children between the ages 0–20 within the Makoko region who haven’t been able continue their education at this time due to the global COVID-19 pandemic. If you have cryptocurrency and would like to support the cause you can do so using; https://covid-19-conflux.webflow.io
Blockchain trading Africa and trading communities: Blockchain Trading: With the crypto-fever taking the trading community by storm, a number of African investors are latching themselves to cryptocurrencies in search of profitable returns. As a fully decentralized system, the blockchain technology offers a secure mode of transactions to the users, as the digital currency is regulated by cryptography. Unlike regular currencies, cryptocurrencies are not issued by central banks, whereby their value does not depend on the directives of the banks. As evident from the market response, cryptocurrencies are extremely volatile assets, and many crypto skeptics have ruled it out as a bubble. Despite the turbulent market conditions, many traders, both newcomers, and seasoned ones flock into this territory, for different digital currencies, if traded judiciously, can be hugely rewarding. Werner van Rooyen of Luno, one of the largest trading platforms in South Africa, affirmed that “there has been a massive increase in interest in cryptocurrencies in the continent.”
Conclusion: In some ways, Africa is more prepared for a move to crypto than any other continent is. Asides from remittance and currency volatility, financial inclusion is another top concern in Africa with about 380 million Africans in the continent being unbanked. Mobile money has been a key driver in reducing the number of unbanked adults. With the number of people already open to using this technology, crypto exchanges and wallets that offer fully functional apps for mobile users are set to benefit immensely.
