Why is Africa Using Bitcoin
A total of over 1,2 billion people live in Africa, 77% of them people do not have a bank account. Financial inclusion or the lack of it is a huge problem. According to a study by the African Development Bank (AfDB) the most frequently cited reason for not having a bank account in Africa is the lack of funds to use one for. Over 80% of unbanked people surveyed gave this as a reason. Cost, distance and documentation needed were also cited as reasons. For example, if you would want to maintain a checking account in Uganda the cost of it is an equivalent of 25% of GDP per capita annually.Bitcoin can solve a lot of problems in Africa. Although bitcoin is used as an investment mainly in the west, Africa is truly using it for what it was made for. Their financial passport. Anyone that has an internet connection has access. No need to travel far and pay high fees to set up a basic bank account. As 85% of the African population own a mobile phone, they can easily and quickly conduct their business with the digital currency.
The use of bitcoin has skyrocketed in Africa in the past few years. Here’s an overview of African countries with the highest growth in bitcoin use and why they are doing this.
NIGERIA
Nigeria is currently experiencing economic and political hardship. This is seen as the biggest economic turmoil in 25 years. Nigeria depends on petrodollars for 70% of their revenues and 90% of earnings on exports. As the oil sector fell 14% and on top of this their economic troubles have been exacerbated by a severe foreign currency shortage, this affects all the other sectors as well, not just the oil economy.
Due to this manufacturers are having trouble importing goods and are having to lay workers off. Business analysts complain that the government has been too slow to react to the crisis, particularly with the management of the Naira. Nigerian Central Bank said in June it was moving to a “purely market-driven” currency system. However they continue to restrict access to dollars for importers of items that it considers non-essential such as rice and toothpicks. This has driven up demand for dollars in the black market, where it is traded at over a 30 per cent premium.
On top of the economic turmoil, Nigerians are also faced with Boko Haram. Across the region, the war against Boko Haram has forced over 2.6 million people from their homes
