By Peter Nalika
EMURGO Africa, in collaboration with PwC, released the State of Web3.0 in Africa report, offering a comprehensive analysis of blockchain and Web3.0 technologies in Africa and the Middle East and North Africa [MENA] region. EMURGO Africa, a startup VC, scouts and invests in scalable blockchain startups.
The report highlights Africa’s remarkable growth in blockchain investment. In 2022, blockchain funding in countries like Kenya, South Africa, and Nigeria skyrocketed by 1,668%, reaching a total of USD 91 million. This demonstrates Africa’s expanding influence in the global blockchain arena.
The report demonstrates the impressive progress and potential of blockchain and Web3.0 technologies in Africa, with a focus on Kenya’s leadership in blockchain adoption and digital innovation. Kenya has experienced rapid growth in implementing blockchain solutions that drive economic development in East Africa.
South Africa is also experiencing a growing adoption of Web3.0 and blockchain technologies, which are revolutionizing industries through secure and transparent data management in Southern Africa.
Additionally, Nigeria is recognized as one of the top 10 countries worldwide in terms of crypto adoption, highlighting its role in promoting financial inclusion and fostering innovation in the digital currency sector in West Africa. These findings highlight the transformative impact of blockchain and Web3.0 technologies in Kenya, South Africa, and Nigeria, establishing them as key contributors to the digital revolution unfolding across Africa.
There are numerous misconceptions about what blockchain truly is. For example, while it offers pseudonymity—meaning users are identified by their public addresses rather than personal information—it is not completely anonymous. Every transaction recorded on a blockchain is visible to anyone with network access. In certain cases, with enough effort and analysis, it is possible to link transactions to real-world identities.
Furthermore, blockchain possesses unique properties that make it suitable for specific use cases, but it is not a one-size-fits-all solution. Traditional databases excel in terms of speed and scalability for centralized systems, whereas blockchain’s strength lies in its decentralization and trustless nature. Depending on the specific requirements of an application, a traditional database may be a more practical choice than a blockchain.
While EMURGO Africa acknowledges these misconceptions, Ahmed M Amer, CEO of EMURGO Africa, states that their role is to educate individuals and organizations about the potential benefits of this technology. For example, its relation to cryptocurrencies, its cost-effective processing power for highly secure data, and the additional layers of digital currencies and stablecoins, along with how they can be utilized in economies for trading.
Blockchain was designed with Africa in mind, as it has the potential to boost African economies. Most countries in Africa are optimistic about this technological infrastructure. EMURGO Africa utilizes its investment capabilities to educate Small and Medium Enterprises [SMEs] by providing liquidity for them.
Regulating Blockchain Technology
Governments and authorities are actively involved in developing and implementing legal frameworks to address the use of blockchain technology and cryptocurrencies. However, it is important to consider a balanced approach that avoids excessive regulation to encourage innovation. Ahmed believes that regulations should not impede the progress and potential of blockchain innovations.
Nicholas Nesbitt, the Chairman of the Capital Markets Authority of Kenya, acknowledges the challenges faced in regulating blockchain technology in Kenya, such as the lack of regulatory frameworks and conflicts between the Central Bank of Kenya and Capital Markets Authority of Kenya. These obstacles hinder the establishment of effective systems to regulate blockchain technology.
Regulatory frameworks are designed to safeguard the rights and obligations of individuals and businesses operating within the blockchain ecosystem, ensuring compliance with the law and protecting consumers.
On a global scale, the regulation of cryptocurrencies is evolving, with many countries actively developing or implementing regulatory frameworks. Only a small percentage of countries enforce outright prohibitions on cryptocurrencies, indicating a growing recognition of their potential benefits.
Despite Africa receiving a relatively small portion [0.5%] of global blockchain funding, the continent’s commitment to Web3.0 technologies and digital currencies remains strong. This dedication has the potential to reshape Africa’s technological and financial landscape, paving the way for unprecedented financial inclusion and fostering innovation.
The writer is a Technologist and Communication Consultant