Africa has been making strides over the past couple of decades. Technological wise, the continent is catching up with the rest of the developed world but poverty due to unemployment remains one of the biggest challenges faced by its residents. New, promising, and disruptive technologies such as cryptocurrencies are curving out a new way for Africa to do business with the world, and we explore them below.
Provision of Meaningful Employment Opportunities to University Graduates Without Jobs
The level of unemployment in Africa is so high that university graduates in countries like Uganda, Nigeria, Kenya, South Africa, among other countries are resorting to side hustles due to a lack of jobs. Most college-going students and graduates represent a significant segment of the population in Africa that have access to smartphones which they use to trade cryptos—a trend that is on the rise thanks to the widespread sharing of bitcoin trading success stories on social media.
Nigeria, Kenya, and South Africa are also some of the jurisdictions in Africa where there is significant bitcoin trading activity. It is also worth pointing out that the spike in demand for cryptos by the young tech-savvy population has led to an increase in crypto-accepting (e-commerce) business ventures—most of which are run by entrepreneurs in their youth—an indication that cryptocurrency adoption is stimulating economic activity in Africa.
Easy accessibility to information about bitcoin and cryptocurrencies has also demystified earlier skepticism on the technology. Consequently, there is a growing number of individuals across Africa who are investing in cryptocurrencies for long-term gains. Instead of trading on cryptos, these individuals are saving them up hoping that they will increase in value since they consider cryptos as a lucrative investment opportunity or source of long-term employment.
Breaking Barriers in International or Cross-Border Remittances
There is a limited number of money transfer services that residents of Africa can use to facilitate cross border money transactions within the continent. The available money transfer services cover specific regions in Africa–something that makes transferring funds to uncovered regions both cumbersome and expensive.
Individuals sending money to Africa from Diaspora also have a limited number of international money transfer options that they can use to facilitate their transactions. Some of the available international money transfer options charge up to 20% on the value of the transaction, and this makes sending money to Africa from diaspora very expensive.
With cryptocurrencies, making cross-border transactions is possible across every country in Africa. In addition to enjoying seamless cross-border money transfer, cryptocurrency users can also enjoy cheap to almost free transactions even when they are sending money from diaspora to their friends and family in Africa.
Cryptos are allowing entrepreneurs in the continent to seamlessly trade, send and receive payments. Africa, unlike other regions of the world, doesn’t have a common currency denomination for trade. Entrepreneurs taking part in regional/international trade or individuals purchasing products or services from a different region can benefit from using cryptocurrencies because it allows seamless, near-free, and safe cash transfers, whether regionally or locally.
Empowering African Entrepreneurs
In most cases, African Entrepreneurs are often troubled lot. These individuals have to overcome government policies and regulations that increase the complexity of doing business instead of reducing them. Some African countries have come up with measures that favor small and medium enterprises, but the impact of these policies is hardly felt by entrepreneurs.
Cryptocurrencies, on the other hand, are empowering the entrepreneurs in the continent by allowing them to have instant access to the fiat currency of their choosing without having to transact with different banks. A business owner running an e-commerce store in Nigeria can, for instance, order supplies from South Africa, then exchange his/her cryptos to the South African Rand at an exchange, before paying the South African-based supplier in the country’s local denomination.
A few clicks or taps on a screen is all an entrepreneur needs to facilitate international cash transfers or regional cross-border fund transfers. In addition to making, it easy for business owners and entrepreneurs to make payments for goods and services, cryptocurrencies are also allowing African entrepreneurs to receive payments in different international denominations. Saving up to 20% on transaction charges can allow entrepreneurs in Africa to receive remittances and payments from abroad to improve their products and services—a move that has the potential of increasing the value of Africa’s e-commerce
sector.Rooting Out Fraud by Improving Transparency in Transactions
Cases of online fraud are rampant in some African countries. Nigeria is one such country, and this explains why the country is blacklisted by international money transfer giants like PayPal. Cryptocurrencies run on the blockchain network. Every transaction on the network is recorded and stored on decentralized ledgers which are tamperproof as they can’t be manipulated. African businesses that accept cryptocurrencies can improve their reputation as trustworthy brands since all their crypto transactions are recorded on a publicly distributed ledger. These brands can also use cryptos to receive payments from any region around the world. Consequently, businesses in Nigeria can receive payments from international locations—but they will have to convince clients who make payments via paypal to switch to cryptos.
African startups that accept cryptocurrencies are finding it easy to do business across the world. Luno Exchange is one such brand, and the South African-based startup now boasts of over 1.5 million customers spanning from over 40 international locations. Cryptocurrency transactions are not only safe, they are also straight forward, and hassle-free. African enterprises that want to forge a healthy and transparent relationship with partners and other businesses can embrace cryptocurrencies to improve transparency in their transactions. Businesses that embrace digital currencies in Africa can similarly partner with like-minded enterprises from different jurisdictions around the world—something that might lead to better business relationships that result from shared business values.
Crypto-Backed Gambling Is Spurring Economic Activity in Africa
Some people find it hard to believe that gambling is an economic activity. So, let us dive into a brief demystification as this will get you closer to the facts you need to know. Gambling increases the demand for goods and services, therefore, stimulating any economy—a phenomenon currently being witnessed in Africa, especially in countries where sports betting and online gambling is becoming popular. Signing up at a bitcoin casino is a quick and easy process. There are a number of bitcoin casino that accept players from Africa. Players who sign up on these platforms can play using cryptos. Similarly, these players will be able to withdraw their winnings in cryptos.
In Kenya, gambling is seen as a legitimate economic activity and this explains why most of the gaming enthusiasts use the winnings to set up small to medium-sized enterprises. If the trend in Kenya is to go by, we expect that gamers in Africa who gamble on bitcoin casinos will also use their crypto winnings to set up different enterprises. These individuals could also spend their winnings buying goods and services from the locally available cryptocurrency ecosystem. Food, electronics, and online tickets can be purchased using cryptos on the ecommerce sites that support these digital currencies—a move that will bolster economic activity in the continent. Residents of African nations interested in crypto gambling should sign up on CO2 Neutral bitcoin casinos as this will help in sustaining the world’s carbon footprint.
As you can see, it is evident that cryptocurrencies are providing opportunities for the unbanked in Africa. A smartphone is all that is needed to access cryptos and the blockchain network—and they are becoming more affordable. The increasing internet penetration in Africa also means that more businesses are moving online (establishing an online presence either as a way to market or sell their goods or services). The confluence of these factors is creating an enabling environment for the previously unbanked in Africa to take part in different ecommerce and economic activities either locally or internationally.