- According to James Mwangi, the chief executive of Equity Group Holdings Plc, Cryptos could potentially complement mobile money in Africa
- GSMA estimates that about 615 million people in Sub-Saharan Africa will subscribe to mobile services by 2025. This equates to 50% of the region’s population
- Africans must jump ship on adopting fourth industrial technologies such as blockchain and cryptocurrencies, as these are among the ways that Africa can get ahead of other continents
Among the industries that have ridden on the rising technology adoption in Africa is the mobile money transactions industry. According to GSMA’s 2022 State of the Industry Report on Mobile Money, mobile money transactions in Africa grew by 39 per cent in 2021 to US$701.4 billion.
The value makes up about 70 per cent of global transaction values, which hit over US$1 in the same year. The report shows that there are now 1.35 billion mobile money accounts globally, an increase of 18 per cent since 2020. Africa still dominates with 621 million accounts and with customer growth of 17 per cent in the region from the previous year.
Despite this tremendous success, the mobile money transactions industry has not yet hit half of its potential in Africa. GSMA estimates that about 615 million people in Sub-Saharan Africa will subscribe to mobile services by 2025. This equates to 50% of the region’s population.
In 2020, the number of people in the region who could access a mobile phone stood at 415 million people out of 1.2 billion people. Internet connection is also still relatively low, covering only 43.1 per cent of Africa. These statistics show that mobile money transactions still have a bigger part of the population to cover.
The Regulation of Cryptocurrencies
According to James Mwangi, the chief executive of Equity Group Holdings Plc, Cryptos could potentially complement mobile money in Africa. This can only be achieved if regulators on the continent are made to change their perceptions and stand on digital currencies.
According to James Mwangi, the boss of one of Kenya’s biggest lenders, central banks in Africa first need to be enlightened about the benefits of relaxing strict regulations on cryptocurrencies.
Dr Mwangi is the first local bank CEO to come out in public and share his views on the benefits of crypto.
In his statement during the Bloomberg invest: Focus on Africa conference, the CEO of Equity noted that most central banks in the continent have banned the use of cryptocurrencies or imposed unfriendly restrictions on their use. However, he further noted that several countries had explored ways to embrace cryptocurrencies. Recently, the Central African Republic became the first country on the continent to legalize bitcoin.
According to James Mwangi, Africans must jump ship on adopting fourth industrial technologies such as blockchain and cryptocurrencies, as these are among the ways that Africa can get ahead of other continents.
“Africa will benefit substantially from leapfrogging on the fourth industrial technologies, and cryptocurrency is one of them,” Mwangi said.
Advantages of embracing emerging technologies in Africa
The CEO of Equity emphasized the need for African governments to implement favourable policies toward cryptocurrencies. He tagged the success of mobile money transactions in Kenya to the willingness of regulators to try new technologies, saying that they grew to a point where they have outpaced hard currency transactions.Mwangi also suggested that using emerging technologies like artificial intelligence could be the basis for the continent’s leapfrogging into the Fourth industrial revolution.
Uganda bans cryptocurrencies
Convincing governments of the importance of cryptocurrencies in Africa will not be a walk in the park. Last month, the Bank of Uganda issued a circular to all payment service providers, including mobile money operators, restricting crypto trading. The circular said that allowing crypto transactions opens the country to fraudulent deals, money laundering, the sale of illicit goods, and online scams.
The Ugandan parliament had earlier criminalized Ponzi schemes in the country, always associated with cryptocurrencies. These Ponzi schemes have led to the loss of money by many citizens in the East African nation.
Nigeria, Tanzania, and Ghana, among several other countries, have also issued restrictions against cryptos. This has slowed down the adoption of these digital currencies.