As Africa wakes up to a new dawn of digital cash and blockchain technology, all eyes are focused on how very diverse countries react and quickly adapt to the new era. A continent dubbed a “dark continent” at a time by Europeans when little was known about the 2nd largest continent with a population of 1.11 Billion people. A lot has changed over the years, with African countries trendsetting in many areas of economic growth, Literacy levels, Education, the Health sector, and Technological advancement.
In this article, we will seek to analyse and see why Africa is the new frontier for digital cash and blockchain technology. First, let’s begin with the known facts, Africa has a population of over 1.11 billion people, has 54 countries in total, and has over 2,000 spoken languages, with the most commonly known language being Swahili, Arabic, Berber, Hausa and Yoruba and covers a surface area of over 30.3SQ Km. Economically, there is about 8 Regional trading block that includes EAC, IGAD, ECOWAS, SADC, COMESA and ECCAS, with the major exports being oil, gas and crude oil, coffee, grains, livestock, textiles, clothing, shoes and precious metals & Minerals.
The above facts are important as they show Africa’s importance to the rest of the world in terms of its economic strength, geographical placement and potential. In the most recent CBDC tracker, out of the 91 countries that have recorded their CBDC development, launch and research status, 12 are African countries; this is a praiseworthy figure considering very little is known about this vast, explosive, “ripe for picking” market. It is important to note that there is an estimated number of 690,000 registered software engineers in Africa, mostly based in Nigeria, South Africa, Egypt and Kenya.
Central Bank Digital Currency (CBDC) is a new digital currency (digital) that governments worldwide are experimenting with. It’s actual currency but in digital form. The Central bank controls the currency issued alongside the physical cash printed and in circulation. At the same time, blockchain technology is the platform that will allow the processing and recording of these transactions. The four countries are at the forefront of CBDC development, with Nigeria launching its e-naira, South Africa expected to launch before the end of the year and Kenya in very advanced stages of research.
What makes the African continent the place to watch in terms of CBDC? First of all, 12 countries out of the total 54 countries have initiated the process of research & development of this new form of cash, with one country successfully launching and now using their CBDC. This is an impressive technological advancement. Secondly, various opportunities present themselves in Africa that the introduction of digital cash can easily manage. Firstly, development and advancements in infrastructure projects funded by European nations and regional trading blocks.
With digital cash, loan disbursements will be seamless, and there will be no bottlenecks in the approval process. High transaction costs will be eliminated, and lastly, reduced corruption cases as there will be minimum cash handling. Thirdly, with international business setting up and a skilled workforce working across borders, payments will be easier, faster and more efficient as there will be no third parties involved, and the transaction fees will be affordable for common people. In conclusion, It’s high time that world investors keep their eyes glued on Africa so that they are not shocked when she stands tall and quickly tries to catch up with the rest of the world’s advanced economies.