Africa is a resource-rich, expansive landscape that can fit China, India, the USA, and half of Europe's landmass within its boundaries. Roughly 1.5 billion people live across 54 countries, and it's estimated that 40% of the population is 15 years old or younger. Its population is expected to grow to 2.5 billion by 2050.

Nigeria and Seychelles, Ethiopia, Ghana, Mauritius, Kenya, Rwanda, Sierra Leone, South Africa, and Tanzania have already made inroads or formally declared their interest in blockchain and fintech industries.

Nigeria and Seychelles raised over 50% of all blockchain-based venture capital investments on the continent as Africa's YoY VC investment increased by 1,100%. Nigeria is also one of the largest oil exporters in the world and has become the wealthiest country in Africa. While Nigerian millionaires grew by 44% over the past decade, 60% of the country still lives on less than one dollar per day, so there is ample room for crypto economies to disrupt the 10th largest GDP and help level the playing field.

Blockchain Solutions

Currencies

National currencies in the region often face unacceptably high inflation rates. Zimbabwe's currency hyperinflated in 2007 to the point that prices doubled every 24 hours, and the South African Rand has significantly lost its value this past decade. This level of economic instability poses significant challenges for individuals and businesses seeking to carry out transactions or preserve their savings over time. Blockchains offer a compelling alternative by enabling users to safeguard their wealth with non-custodial wallets in more stable digital assets, such as USDC, USDT, and other stablecoins. They also facilitate transparent and accessible methods for fundraising and investment.

Currencies traditionally have acted like languages in that the ones that survive only do so with an army and a navy. Bitcoin disrupted this paradigm, introducing a decentralized framework for global payment systems. By leveraging stablecoins and interconnected token networks, African countries can bypass the volatility of Bitcoin and the inflation-prone domestic currencies, unlocking new opportunities to enhance economic growth and resilience.

Remittances

African remittances have been in a perpetual bull market.

Remittances are payments foreign workers send home to their families, and the remittance industry has room for improvement. Average wiring fees are 7.45%, which equates to over 27 days of a low-income worker's annual income. In 2017, low—and middle-income countries' remittances amounted to $466 billion, and remittance fees were $34.7 billion. This is not stealing from the rich and giving to the poor; it's quite the opposite.

To put the dollar value of these fees into perspective, the US's non-military foreign aid budget was $34 billion in 2017.

Crypto does fix this. Using Solana, for example, you can make 1,000,000 transactions for a cost of ~$10. The issue is that banks and vendors in your region may not accept crypto, USDC, or other stablecoins.

Debt & Independence

China recently banned the holding and transacting of crypto in preparation for its Central Bank Digital Currency (CBDC). China is also Africa's largest creditor.

Time plays an important role in China's geopolitical strategies, and over the past few decades, Chinese firms have invested in infrastructure projects across Africa. Resource-rich but economically developing nations struggle to repay these debts, but these countries don't have the resources or financial infrastructure to operate independently. Blockchains offer a compelling alternative by enabling businesses to operate globally without requiring permission and allowing individuals to securely manage their assets, reducing reliance on domestic currencies and untested local banking systems.

Adoption Issues

El Salvador adopted BTC as a domestic currency in June of 2021, and the results have been mixed. Crypto Critics' Corner recorded four podcasts about this situation, and according to them, it seems all is not going well. They are biased no-coiners, so take it with a significantly sized grain of salt, but to be fair, the IMF recently downgraded El Salvador's credit rating, and the rollout of Bitcoin's Lightning network has been met with significant resistance from vendors and individuals within the country.

It's also worth considering that Nayib allegedly "deployed the armed forces and civil police around and inside the Legislative Assembly" to "coerce the legislative branch to act on his crime bill."

More recently, the Central African Republic (CAR) made a confusing decision to adopt BTC as a domestic currency this past April. The CAR is ranked 188/189 on the global welfare list, and only 4% of the CAR population has access to the Internet.

Over the past few years, the CAR government has become very close to Putin's regime in Russia after decades of internal strife and external influence from France. French analyst Thierry Vircoulon told the AFP news agency, "The context, given the systemic corruption and a Russian partner facing international sanctions, does encourage suspicion."

To strawman the other side of the argument, Economist Yann Daworo told BBC Afrique that businesses and individuals "will no longer have to walk around with suitcases of CFA francs that will have to be converted into dollars or any other currency to purchase abroad." This sounds like a cope—will these individuals have to be in the 4% of the country with internet service to access their funds? Will the fees associated with transactions on the Bitcoin network eat into CAR citizens' savings? Probably, and yes.

Final Thoughts

As Bitcoin and blockchains are more readily adopted in emerging markets worldwide, the need for scalable, transparent, decentralized networks is becoming more apparent. Still, it needs to be done in ways that benefit the individuals within these markets. Fees on BTC can easily be $5-15 per transaction, which is more than most make in a month in places like the CAR. It's not feasible and is a step backward to have BTC involved when you consider that networks like Solana offer nearly free transacting.

Blockchains are not a panacea. They fix specific problems that are not well understood by the masses, and in their current state, they require a level of financial and technological literacy that is not widespread, so builders and adopters need to be wary of this. In the meantime, Africa continues to invest in blockchain solutions, and builders across the continent continue building.