During the World Economic Forum (WEF) on Africa which held in South Africa recently, Blockchain technology and the role of entrepreneurship in driving Africa’s prosperity in the Fourth Industrial Revolution (4IR), were some of the key topics that took the centre stage.
Currently, many young Africans see bitcoin as an opportunity to develop commercial ventures; users set up side-hustles and their own full-time businesses including remittance businesses. Nigeria, Ghana and South Africa have been the most active users of this technology with many operating drop-shipping businesses, payment services, as well as import-export ventures amongst others using bitcoin.
One of the leading bitcoin market place, Paxful, which has over the years engaged many business owners who see a future for themselves in the crypto space revealed that beyond the big players, there are many ambitious up and coming bitcoin savvy business owners who focus on the African market.
According to a Grey, a Malawian born entrepreneur, he helps consumers buy and sell bitcoin and has managed to expand his business to employ staff that help consumers in Malawi to navigate the crypto space to better meet their financial needs. He also mentioned that many of his customers have limited access to credit cards, opting instead to buy bitcoin in order to purchase products and services on various e-commerce and streaming websites. Some of his customers will resell the products they buy for a profit. Others will keep the products for personal use or send them to loved ones.
Some of Grey’s customers also use bitcoin to purchase cars from vendors in Japan and resell in various African countries. Interestingly, most of his customers find him on social media and through messaging apps.
Social development organizations that operate in Africa like Zam Zam Water and Grow Educare Centres have also expanded their sights to include cryptocurrency in raising funds for their projects. Zam Zam Water has built schools and pays teacher salaries for communities in need in Rwanda with money raised in the bitcoin industry. Bitcoin funds raised by Grow Educare Centres have bought supplies – including books, stationery, and toys – for low-fee kindergartens that support disadvantaged communities.
“While African entrepreneurs continue to face many lingering challenges, we have seen first-hand on our platform how the opportunity to use technology and innovate can achieve greater financial inclusion as well as socio-economic development and job creation,” Ray Youseff, CEO and co-founder of Paxful.
Despite this growing trend, African governments are still not regulating cryptocurrency. There is the fear of it crashing again just as it did last year which saw investors losing their money. Cryptocurrency can also be used by criminals to funnel funds which are already happening. They also believe that the risks outweigh the gains.
Youseff added that “As an African-born tech entrepreneur myself, my hope is that African governments, regulators and policymakers will create the right operating environment for the continent’s young Digi-entrepreneurs to succeed,” he added.