Africa is definitely not left out as far as the global bitcoin and cryptocurrency revolution is concerned. There is a growing cryptocurrency market in many countries across the African continent.
According to a 2015 Bitcoin Market Potential Index research carried out by Garrick Hileman, a professor at Cambridge University, almost half of the 30 countries with a high propensity for bitcoin uptake are in Africa.
This is by no means a startling revelation for a continent that is traditionally beset by political turmoil and socio-economic crises. African entrepreneurs of necessity always need to find a means to compete in the global business scene.
Perhaps due to the scale of the deficiencies inherent in the economy of many African countries, the crypto market has been able to carve out a considerable niche for itself within the continent. Cities like Lagos (Nigeria) and Nairobi (Kenya) have become bitcoin hubs as far as Africa is concerned with a lot of bitcoin commerce being carried out.
In 2017, the growth in the demand for bitcoin in Nigeria increased by almost 1500 percent, second only to China.This situation has led to the establishment of a number of cryptocurrency market services that are enjoying an unprecedented level of annual turnover.
Mpesa and BitPesa are just two examples of firms that have tapped into the cryptocurrency market in Africa to good effect. Both have offices in different major cities across the continent and collectively account for billions of dollars in equity as far as the African crypto market is concerned.
The crypto market has also had a considerable effect on the remittance market in Africa. Services like NairaEx have tapped into the over $21 billion Nigerian remittance market to good effect. These services offer lower fees than conventional services are becoming a firm favorite of many residents.
According to David Ajala, the chief executive of NairaEx, bitcoin and other cryptocurrencies have become an enticing proposition for many Africans who wish to send money to their loved ones in other countries.
One of the biggest drivers of the growing bitcoin and crypto adoption in Africa is the volatile nature of the national currencies of many African countries. This makes it difficult for people to do business within the continent as the currency of many countries is hardly ever stable.
Many businesses in Nigeria, for example, have been forced to adopt the US dollar. With depleting foreign reserves, this method hardly offers any sustainability. The crypto market offers a viable refuge from many of these economic and political instabilities that adversely affect the exchange value of the fiat currency of many African countries.
The price of cryptocurrency is driven purely by market forces far out of the reach of inefficient governments and impulsive central bankers.
There is also the issue of institutionalized corruption that has crippled many African economies as well as the lack of trust of the citizenry in the ability of their respective governments to be able to provide credible leadership.
Many African businesspeople have instead cast their bet on the crypto market as a way of bypassing the hindrances thrown up by poor economic planning and inefficient government policies.
Just like in places like South Korea, Germany, France, and the United States, some African countries are starting to shine their spotlight on the emerging crypto market. Speaking in Abuja, Godwin Emefiele, the governor of the Central Bank of Nigeria said that cryptocurrency investment was akin to a high-risk gamble.
The Nigeria Deposit Insurance Corporation (NDIC) has even launched a committee to investigate the cryptocurrency market in the country. In Egypt, the situation is even more severe with the Grand Mufti Shawki Allam issuing a fatwa in January of 2018 against bitcoin.
Feature image by Brett Ruiz