Africa is waking up. For many years, the potential of the continent’s youth has been growing. Now, as this talent pool blooms across Africa, the world is starting to take note. Combined with the revolutionary power blockchain provides, we are entering a golden age of African development.
With 226 million people aged between 15-24, Africa has the youngest population in the world and, by 2045, the African workforce is predicted to be the world’s largest, giving the continent an enviable and deep spread of talent which is soon set to be thrust onto the world stage.
This post is part of CoinDesk’s Year in Review 2020 – a collection of op-eds, essays and interviews about the year in crypto and beyond. Akon is the co-founder of the Akoin initiative, Jon Karas is president and co-founder of Akoin and Lynn Liss is chief operating officer and co-founder of Akoin.
To this generation of young, up-and-coming entrepreneurs, the idea of having to rely on systems of finance, government and technology built on the crumbling edifice of tradition belongs with the dinosaurs. They want to build their own destinies and future relying on their own skill and resources.
The growth of crypto on the continent means they have the opportunity to do just that. Research from Arcane found that Google Trend data showed African countries repeatedly rank in the top 10 on searches for the term “cryptocurrency.”
In sub-Saharan Africa alone, there are about 350 million unbanked adults, which accounts for 17% of the global unbanked population of two billion people.
For many Africans, being able to transact on an immutable, censorship-resistant and permissionless blockchain that cannot be affected by the hyperinflation often seen in African economies, is the first step towards achieving self-sovereignty over their finances.
Through blockchain people are able to build and access systems not previously available to them, for example micro lending platforms that can help new businesses to establish themselves.
The technology also has the potential to solve real-world practical issues such as identity management and land titling. Indeed the Global Partnership for Financial Inclusion (GPFI) wrote in its G20 submission on digital identity:
This technology is being trialed for various financial sector applications including funds transfers, payment settlement and regulatory oversight, and due to its decentralized and transparent nature also increasingly in identity management as well. The immutable nature of the ledger ensures that dispute resolution is embedded and enforced by computer protocol. Moreover, the transparency, resilience and replication at each node offered by the shared ledger is a useful tool for tracking and maintaining the integrity of the information.
Blockchain technology can give those who are unbanked access to services that may have been unavailable to them. For example, through a decentralized app marketplace built on blockchain people will have access to new ways to save money, pay bills and other people, request loans, sell their own goods and services, and build their own tools to serve other niches in their community.
Rather than their finances being at risk of fluctuations in a hyper-inflated fiat currency, use of a stable digital asset means people can gain greater control of their finances and even complete custody over them, allowing them to opt out of a system that provides them with no benefits or security, into one that does.
Leading the charge
Africans innovating with mobile technology long before the West, for example making mobile phone minutes as currency. This characteristic of taking leaps forward in technology is what will drive the growth and success of digital assets on the continent, and we believe as Africa leads in this area, the rest of the world will be watching closely to see the developments it makes.
While western countries and the rest of the world wrestle at unpicking years of tradition, red tape and regulation to make digital assets fit, African countries – if their leaders choose – are able to embrace change and foster implementation much more quickly.
Africa is one of the only places in the world that can start from zero and really implement and utilize every single new development and invention that’s existing today without breaking down existing infrastructure. When you look at all the major countries, from the United States to European countries to China, all of these nations are in a position where they can’t conform as quickly to the latest technologies without having to rebuild everything that’s already built, whereas African nations can start from the beginning and lead that charge forward.
The future of finance lies in digital currency and digital transactions. You can see how many countries are working on developing digital versions of their currencies. It is only a matter of time before all transactions are digitized and paper money is consigned to the history books. The countries that grasp this reality before anyone else will be the ones at an advantage.
Blockchain and digital assets will act as a key to help unlock the potential of the huge talent pool in Africa
We believe the future of the world is going to be digital. It’s going to all be computerized and moved in and controlled by apps and developers. Even with music, while everyone was selling CDs and and vinyl from little specialty shops and singles, I was more focused on ringtones, which was the digital aspect of the music business.
It has happened in the music industry with the evolution from vinyl to cassette tapes to CDs and now to digital music. And it will happen with money, too.
Africa is already at the point where mobile phones and mobile phone minutes are used for transactions, it is only a few steps away from moving into an economy based on cryptocurrencies, instead of ageing and devalued fiat.
This is why we are getting in front of the curve now and embracing what we believe is going to represent the dominant model young business leaders and entrepreneurs in Africa, and eventually, the whole continent embrace.
It represents a method for them to create and earn value determined by themselves and which doesn’t rely on an outdated system powered by a countries fiat currency over which Africans have no control.
We have more than 1.34 billion people in Africa, and within the next five years it will be close to two billion people. The working population is booming and the youth population is expected to grow by more than 40% in the next 10 years. We want Africans who have amazing entrepreneurial ideas to finesse these into something tangible they are able to create a service from and grow their own businesses, but also help their regions to grow, too.
Unfortunately, often the perception of Africa from those living outside it is of a scary and dangerous place. For example, the way they depict Africa in the United States is just so sad because it makes it unattractive and plays on all of its problems, without touching on the positives.
I really want to change that perception and get people seeing it as a viable place to vacation, work and do business.
Ultimately, we have to shape a vision of something that is going to attract people, something you want to be closer to and want to be a part of.
Our hope and expectation is the technology of blockchain and digital assets will act as a key to help unlock the potential of the huge talent pool in Africa, and contribute towards helping it grow, develop and prosper far into the 21st century by taking back control of their finances, their skills and their talents.