Blockchain technology could be an important catalyst for transforming some of Africa's major industries. The upcoming launch of AFCFTA is an opportunity for blockchain to play a "major catalytic role" in supporting greater transparency, visibility, and inclusion across the supply chain. Blockchain has the potential to have the greatest impact on Africa's economic development. Let's take a look at the development of blockchain technology for Africa's digital economy.

Africa and blockchain technology

In Africa, adoption of blockchain technology has been slow but gradual. With the rise of Bitcoin, individuals and businesses are beginning to embrace the new phenomenon. Driven by the many advantages offered by revolutionary technology, this new trend is expected to become mainstream in several African communities in the coming years.

Some African countries have adopted decentralized approaches, particularly in the banking and financial sectors. South African banks, such as the BSA, First National Rand, Investec, Nedbank, Standard Bank and the South African Reserve Bank, use encrypted, secure distributed databases. Private banks have adopted the private blockchain, while the rest have adopted the public blockchain.

Kenya has not been left out. BitPese, a remittance platform that converts digital currencies such as Bitcoin into local African currencies without the involvement of a third party, is being rolled out in the country. Nigeria also recently announced Bitt Inc as a technology partner for its digital currency eNaira, which will launch before the end of 2021.

In the area of land management, Rwanda has a scheme called Bitland, which uses the Ethereum blockchain to protect land ownership by making land details available to the public. Rwanda, in Kenya's transport sector, the National Transport Safety Authority (NTSA) has linked many state agencies to its services with the aim of alerting security personnel to the insurance and other important details such as ownership of vehicles.

This will eventually bring the country to a point where all vehicles will have electronic tags on their windshields that can be detected through the use of special gadgets to help recover stolen vehicles.

In the area of education, Nigeria has leveraged blockchain technology as its government agencies have partnered with the Nigeria Cryptography Development Initiative (CDIN) in the area of education.

In Kenya, the health department has set up a smart platform using blockchain technology, with almost all public hospitals sharing a common center that can monitor data such as the use of public resources and hospital administration. This action is achieved through the development of a cloud-based database.

Other use cases or applications developed in Africa are:

• Provide an online payment system for rapidly growing e-commerce across Africa

• International remittance systems between African expatriates and their countries. • Land security systems (cadastral management), which have been tested in several African countries

• Crack down on the system of counterfeit drugs that decimate our poorest people

• Traceability system for different raw materials and other mining products in our country (safe routes, identification and reliable participants, removal of non-essential intermediaries, etc.)

• Copyright management system

• Attribution and monitoring systems for public procurement (Source: Draft African Blockchain Technology Report)

In Africa, the benefits of blockchain technology are huge. Some include:

• Facilitate cross-border transactions:

• Reduce the high cost of remittance payments:

• Access to financial services

• Ensure privacy

• Create jobs

• Improve the business environment and promote healthy competition.

Blockchain has infiltrated the African continent!

Ethiopia's Ministry of Education has announced a partnership with Cardano to create blockchain-based digital identities for 5 million students and teachers. Cardano, one of the leading crypto platforms, has a project focused on Africa. African blockchain and crypto companies such as Topit, Luno and Yellow Card, which recently raised $15 million, are also leading the building of global trading exchanges. According to the BBC, Nigeria ranked third in the world last year, behind the US and Russia, in terms of the number of countries with the most Bitcoin transactions. But in February, Nigeria abruptly announced that it was banning its banks and financial institutions from engaging in or promoting cryptocurrency transactions. Kenya ranked as the world leader in peer-to-peer (P2P) transactions for the second year running in 2021, which will prompt other African countries to adopt a friendlier approach to cryptocurrencies. Emurgo Africa's $100 million dedicated African blockchain fund will also be a game changer for Africa. Akon, an award-winning American artist based in Senegal, agrees that encryption can change Africa's future.

Central African Republic makes Bitcoin legal tender!

One of the main reasons that believers in blockchain believe cryptocurrencies should be popularized is that they can fight inflation. In Africa, Nigeria's currency has lost 80 percent of its value since 2008, and Kenya's has lost 50 percent in the past 10 years.

So the Central African Republic, one of the 10 poorest countries in the world, announced on April 22 that Bitcoin would become legal tender to help its economy recover.

Industry analysts say that for the people of Africa, financial infrastructure in the context of Web 3 is equivalent to an upgraded version of Web 2 Fintech. "Ten years ago, we started to advocate the new financial infrastructure -- distributed storage, digital operation, mobile banking, online credit + consumer finance /P2P and other mature business models, these combined with the current Crypto play, African people have low conversion costs, can be synchronized online. At the same time, the more Open policy also allows them to conveniently embrace the traditional financial digitalization +Crypto finance." Frank, head of investment and research of Buider DAO, said.

Opportunities and risks coexist. Since May, the price of Bitcoin has plummeted, falling below $20,000 at one point. Bitcoin has lost nearly 70 percent of its value since hitting a high of $69,000 in November. The market capitalization of the entire cryptocurrency market has taken a beating.

"Financial innovation is too cruel. Just like P2P, asset securitization and MBS in the past few years, it will ruin everything at least, and systemic risk will lead to financial crisis." "What's more," laments one practitioner, "Africa is going from Web 2 to Web 3, with regulatory gaps and exponentially higher risks. It's all about sacrificing people in search of an international curve to overtake.

The crypto ecosystem relies on the Internet and electricity for growth, and mobile Internet usage in Africa is still low at 26%. The power grid is still weak and supply is severely inadequate. Also, unlike mobile money, which basically only requires a phone, Crypto wallets require a smartphone.

According to the GSM Association, Africa accounts for more than half of the world's population without access to mobile broadband. Although the African Union is building more than 100 information and communication technology (ICT) infrastructure projects aimed at improving broadband and other related Internet infrastructure services across the continent, much more needs to be done.

With blockchain solutions being progressively explored and developed to address Africa's unique challenges, the potential for blockchain to have an even greater impact seems limitless.

Companies doing business in Africa face a complex and fraud-ridden trading environment. Sometimes, authorities and traders lack the data or capacity to confirm the actual source, mode and conditions of production of traded goods. All this increases costs and makes Africa uncompetitive. Tracking supply chains through blockchain technology would go a long way toward solving these problems. So it's clear that blockchain technology and Crypto are exactly the kind of innovation Africa needs to overcome some of its trade constraints.

Although blockchain technology is just emerging, it has gained popularity in modern society, especially in Africa, where it has been widely used. We have every reason to believe that blockchain technology will have a significant impact on Africa's digital economy and can play a major leading role.