How Important is Blockchain to Africa and does it Play a Significant Role?

Considering the turbulent global financial markets, expensive remittance costs, and restricted banking access, blockchain technology in Africa offers alternatives to tackle their day-to-day issues.

• The lack of modern agriculture, underdevelopment, unemployment, and poverty has slowed Africa’s development in the twenty-first century.
• The absence of common legacy financial institutions and a massive population of predominantly unbanked individuals have significantly contributed to the emergence and acceptance of cryptocurrencies in Africa.
• Currently, Africa is one of the fastest-growing cryptocurrency markets in the world, garnering large investments consistently.

There is little doubt about the transformational impact of blockchain in Africa, its influence on the welfare of nations, and how it affects the continent’s technology standing, according to the second African Blockchain Report 2022 from CV VC and Standard Bank.

Africa is the only global region to have experienced increased venture funding and an explosion in blockchain-specific funding, cementing the fact that the technology is impacting African lives, well-being, and the continent’s resilience.

Blockchain venture funding, as a percentage of all venture funding, is on the rise globally (6,5%). In Africa, blockchain funding achieved a record 15% share of all sector-agnostic venture funds raised by the continent, more than double the global average, highlighting the continent’s continued emergence as a vital blockchain-based startup investment destination.

Africa’s blockchain drivers – brilliant mindset, necessity & impact

The number of African blockchain deals grew by 12%, reflecting that Africa’s sharp minds are driving valuable developments, particularly in the areas of infrastructure, personal identification, record-keeping, and access to financial independence. The report illustrates that the brilliant mindset, energy, and tech capability of the founders, who are leading the African blockchain revolution are exemplary to the rest of the world.

In addition to the deep capability, a significant reason for the vibrant growth of the African blockchain sector is pure necessity. Many Africans cannot rely on vast, centralised, regulated infrastructural systems. As a result, innovation has a clean slate on which to paint and progressive advances seem to follow. These advances sometimes improve existing systems but, more often than not, they are leapfrogging entire legacy systems.

Africa – notable raises by company & country

African blockchain companies with notable raises include Kucoin, MFS Africa, Scroll, VALR, and Carry1st. Seychelles and South Africa accounted for 81% of African blockchain funding. Nigeria is the leading country in terms of the number of blockchain startups funded, followed by South Africa, Seychelles, and Kenya. The Custody & Exchanges category was the highest-funded in Africa with a 52% share, followed by Fintech (24%), and Infrastructure & Development (15%).

Gideon Greaves, MD of CV VC Africa, notes: “With the potential to create entirely new business models the African blockchain industry is understandably experiencing rapid growth, with investors readily embracing it. Africa exhibits a magnetic collaborative environment among developers and organisations in the space. This supportive ecosystem drives the industry. Our Report indicates that the transformative potential of this technology for business operations is undeniable. As investors continue to express confidence in the blockchain industry’s sustainability and prospects, we anticipate further growth and investment in Africa in the coming years.”

Africa – real-life blockchain utility

The report shows that blockchain technology continues to impact Africa to a degree that is unprecedented anywhere else in the world. It demonstrates real-life utility such as in social impact, proptech, tokenization and NFTs, energy, government, and education. The 70-page report presents an all-encompassing view of the region’s blockchain landscape, including in-depth funding data, regulatory facts, industry advancements, an investor watchlist, and engaging perspectives from pioneers and leaders within the burgeoning industry sectors.

Africa – the most vigorous blockchain region globally – at 429% the highest global growth 

CV VC’s African Blockchain Report 2022 presents an analysis of the African industry in the context of global metrics as well as continent-specific dynamics. Despite facing economic and socio-political challenges, the global blockchain industry broke records yet again in 2022, with a total of 1 828 deals representing an almost 30% increase from the previous year.

Among global regions, Africa emerged as the most vigorous, with blockchain companies achieving the highest funding growth rate of the report’s globally assessed regions. In 2022, African blockchain startups raised an impressive $474-million, marking a staggering 429% year-on-year increase in funding. Combining the sharp increase in blockchain funding with the fact that Africa had the smallest global increase in the number of blockchain deals, yet the only region globally exhibiting increases in all deal sizes, indicates that African blockchain startups are raising larger cheques and investors are gaining confidence. This is against the backdrop that Africa’s share of all global funding has risen more than any other region by a considerable margin.

Africa – leads its own development & social impact

The report also demonstrates that blockchain applications for socio-economic impact are giving Africa the opportunity to lead its own development and act as a fine example to other nations on how to leverage the technology.

“The Report demonstrates that the surge in the utility of blockchain technology shows no signs of slowing down,” says Ian Putter, head, Blockchain CoE&CA Training Office at Standard Bank. “We at Standard Bank are embracing the technology to bring about transformation in a regulated and inclusive manner. Blockchain is fundamental to the next iteration of the Internet – Web3.

“We firmly believe Web3 will be the economy of the future and appreciate the function that blockchain technology plays in getting everyone there,” he says.

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About: Andries vanTonder

Over 40 years selfemployed 

He is a Serial Entrepreneur, an Enthusiastic supporter of Blockchain Technology and a Cryptocurrency Investor

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