Economic growth in Sub-Saharan Africa is rebounding in 2017 after registering the worst decline in more than two decades in 2016, according to the new Africa’s Pulse , a bi-annual analysis of the state of African economies conducted by the World Bank.
The region is showing signs of recovery, and regional growth is projected to reach 2.6% in 2017. However, the recovery remains weak, with growth expected to rise only slightly above population growth, a pace that hampers efforts to boost employment and reduce poverty.
Nigeria, South Africa, and Angola, the continent’s largest economies, are seeing a rebound from the sharp slowdown in 2016, but the recovery has been slow due to insufficient adjustment to low commodity prices and policy uncertainty. Furthermore, several oil exporters in the Central African Economic and Monetary Community (CEMAC) are facing economic difficulties.
The latest data reveal that seven countries (Côte d’Ivoire, Ethiopia, Kenya, Mali, Rwanda, Senegal, and Tanzania) continue to exhibit economic resilience, supported by domestic demand, posting annual growth rates above 5.4% in 2015-2017. These countries house nearly 27% of the region’s population and account for 13% of the region’s total GDP ~ (WORLDBANK Analysis 2017)
About 33% of the Nigeria population lives on less than US$2 per day, (WorldBank) In 2005 Nigeria's inflation rate was an estimated 15.6%. Nigeria's goal under the National Economic Empowerment Development Strategy (NEEDS) program is to reduce inflation to the single digits. By 2015, Nigeria's inflation stood at 9%.
GDP growth: 2.1% (2016) ~ Source https://tradingeconomics.com
Crypto Currency Such as Bitcoin, Ethereum and Litecoins are booming in Africa, and digital currencies are at a close second, due to the same reason: 30% of Africans lack access to traditional financial services such as bank accounts and credit cards.
Consequently, they are mostly limited to cash transactions, which impede on their ability to choose where to make purchases and do business. Cryptocurrencies play an important role in the development of technology-driven markets, and as Africa shifts a large portion of its business to technological and virtual endeavors, it is only natural that cryptocurrencies should become significant.
Researched from PricewaterhouseCoopers reveals that the acceptance of the cryptocurrency, Bitcoin, among the youth and blockchain enthusiasts has achieved ernomous mass and govermnt need a proper regulations and policies to regulate the market like that of Europe and Japan, Instead of redflagging the potential opportunities on media.
The significants of Crypto currencies in African economy is high lighted below...
PAN AFRICA ECONOMY TRANSFERP
Currently, each African country has their own currency, and Africans are unable to even complete transactions in other African countries within the same system,
Economic growth in Africa is often hindered by the lack of regional trade that cryptocurrencies can enable without necessitating the adoption of a single currency such as the Euro. As a decentralized currency with no real authority, cryptocurrencies would enable less expensive and more widely accepted cross-border transactions between African countries than the currently popular mobile payments. While mobile payments are more well-established and trusted in the region, and they do allow for cross-border transactions, they are costlier than cryptocurrencies and do not work across all borders. Cryptocurrencies enable fast, cheap transactions that will broaden markets and possibilities, both for the individuals and the countries, and contribute to Africa's economy growth.
THE WORLD IN THE CONTINENT FINGERTIPS
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Cross border transactions are currently incredibly expensive for those who are lucky to have the ability, but as 30% of Africans do not have a bank account or credit card, world markets are unavailable to them. The surge in usage of mobile phones has introduced Africans to alternative forms of remittance, which have, in turn, been a tremendous boost to business and individuals. However, mobile payments still rely heavily on currencies such as the Dollar or Euro, as well as African eWallets , all of which cause very high currency exchange fees. Cryptocurrencies are decentralized, and thus, have no exchange fee, as they are accepted worldwide, thus both saving the user fees and enabling them to purchase products and services from other countries, which were previously unavailable to them.
Additionally, freelancers will be able to accept payments in the cryptocurrency of their choice, thus facilitating cross-border work. Freelancers will no longer be limited to business in Africa and will be able to work with clients worldwide, as receiving payments will no longer be a challenge. Payments can be sent and received quickly, anywhere in the world, 24/7, without having to account for banking holidays, currency exchange rates, banking fees, and more.
DECENTRALIZED, SECURE, TRUST, and TRANSPARENCY
Cryptocurrencies have no central authority figure, such as a government, and transactions are transparent. While personal information is never revealed, each person has a unique address where their transactions are listed. As such, cryptocurrencies are safe against identify theft, and merchants cannot add fees without the customer’s’ knowledge. Anyone can view all transactions at any given time, but cryptocurrencies are cryptographically secure, meaning they cannot be manipulated by any person or government. Cryptocurrencies cannot be seized and funds cannot be frozen by governments or financial intermediaries, so users can be confident that they have complete control over their money. For many Africans, this level of security and transparency is precisely what they need and demand.
CAPABILITIES OF CREATING NEW SERVICES BACKED BY CRYPTO-CURRENCIES
The introduction of cryptocurrencies like Bitcoin in Africa can spark numerous technological advances to support its usage. Ideally, people will be able to elect to receive their salary in the cryptocurrency as it been done in Japan. financial institutions can issue cryptocurrency-backed credit cards. both virtual and physical, can also have an ability to be cryptocurrency-based, which can broaden usage capabilities. The emerging of new services will create industry thus creating employment opportunities for the unemployed graduates.
CONCLUSION!!!
While cryptocurrencies boast a plethora of advantages, at the present time, very few businesses, in Africa and worldwide, currently deal with them. As such, adoption and growth in Africa is severely hindered. However, as more international companies begin to accept cryptocurrencies, Africa, too, will be able to reap the benefits. Likewise, cryptocurrencies are currently very volatile, with very few coins available and demand rising daily. However, volatility is expected to decrease with time.
African media houses Radio, TV Stations, should help in publicise the awareness of cryptocurrencies as majority of Africans still lack Internet access.
Finally, since cryptocurrencies are anonymous, it has been known to be used for ill
icit purposes. Nonetheless, while traditionally Bitcoin was viewed as a black market currency used to cover up illegal activities, its widespread adoption by respected companies has given it validation and enabled it to grow. Therefore, African leaders should create enabling environment, Policies and regulations that will make the currencies acceptable among the people.
Contributions, are highly welcome in the comments.
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