The Cardano blockchain-backed entity, Emurgo Africa has released a comprehensive report detailing the state of Web3 and blockchain technology in the continent of Africa.
Amongst the many notable revelations in the report, it was disclosed that blockchain funding across Africa increased by 1,668% between 2021 and 2022. Also, the figures in the report indicate that the adoption of blockchain technology by African countries is the fastest in the world.
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It has always been said that blockchain technology presents a plethora of opportunities for the African continent and the new Emurgo Africa report just reiterates that. The revolutionary technology has proven to possess the qualities of transparency and decentralization to solve challenges such as international remittance, financial inclusion, and land registration.
More on the Emurgo Africa report
The report which is tagged State of Web 3.0 in Africa: Kenya, Nigeria and South Africa, sheds light on the blockchain landscape in three target markets, Kenya, Nigeria and South Africa. The purpose of this study is to continue identifying, supporting and incubating blockchain and Web3 talent in these countries.
According to the report, these three countries were selected due to their high uptake of Web3 technologies and ongoing stakeholder conversations regarding policy development and regulation of digital currencies. Also, Emurgo Africa claims to have noticed a trend of rapid urbanisation across the target countries, due to infrastructural development, technological revolution, and growth of the gig economy.
Specifically, the report says Africa’s crypto market grew by over 1200% between 2020 and 2021, with Kenya, Nigeria, South Africa and Tanzania ranking in the global top 20 for crypto adoption. This trend makes the adoption of Blockchain by African countries to be the fastest in the world, per the report.
Additionally, funding of African blockchain startups increased by 1,668% between 2021 and 2022. In clearer terms, $5.165 million was raised in 2021 while there was substantial growth to $91 million in 2022. Also, in comparison to general funding growth, venture funding growth was 11 times more when considering 2021 and 2022 Q1.
The report further says the industry in Africa is growing exponentially and will continue to do so:
“Investors are keen to fund blockchain startups and companies and the figure is expected to grow significantly in the next few years.” – State of Web 3.0 in Africa: EMURGO Africa 2023
The problem of regulation
It is now more important than ever that as digital assets continue to increase in popularity across the continent, so is the need for a stakeholder-regulators meeting point.
It was emphasized in the Emurgo report that as the need for the regulation of Blockchain and cryptocurrencies increases, key stakeholders need to work closely with regulators.
To put this into perspective, about 20% of Sub-Saharan African countries have banned crypto-assets while countries like Nigeria, South Africa and Kenya are neither here nor there.
For instance, in Nigeria, the Central Bank of Nigeria still hasn’t lifted the February 2021 ban on crypto transactions in the banking system while the National Information Technology Development Association continues to develop an adoption framework for blockchain technology.
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To have a clear pathway towards mainstream adoption, it is expected that the Central Bank of Nigeria would have a dialogue with notable blockchain organizations like the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN), which would be geared towards the lifting of the ban to improve remittances and other financial inclusion hurdles.
In a nutshell, while Blockchain and crypto assets are nascent technologies, there is an increasing need for the development of robust regulatory frameworks. As we continue to work towards this, potential areas of application include; SME Financing, Supply Chain, Smart Contracts for Informal Labour Markets, Governance, Digitising Trade Infrastructure, Title Deed Registration, Verification of Education Credentials, and Mobility.
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