Blockchain technology and the role of entrepreneurship in driving Africa’s prosperity in the Fourth Industrial Revolution (4IR), were some of the key topics taking centre stage at this year’s World Economic Forum (WEF) on Africa.
With nearly 3-million users globally and Africa being its fastest-growing customer base, peer-to-peer global bitcoin marketplace Paxful has an insight into the development of the crypto economy across the continent. The company is seeing an increase in the amount of entrepreneurial activity on its platform. Many young Africans see bitcoin as an opportunity to develop commercial ventures; users set up side-hustles and their own full-time businesses including remittance businesses.
Paxful has found that users from Nigeria, Ghana and South Africa have been the most active to date this year with many operating drop-shipping businesses, payment services, as well as import-export ventures amongst others.
The promise of intra-Africa trade
Intra-regional trade is one of the highest priorities for African governments, as evidenced by initiatives such as the historic African Continental Free Trade Area (AfCFTA) agreement. By some estimates, the AfCFTA could boost Africa trade by more than 33% and generate billions of dollars of GDP gains for the continent over the long term. Various studies have shown that the digital economy presents an opportunity for Africa to deepen trade relations and boost the continent’s GDP.
Already Paxful is seeing that many African users prefer to trade with each other – territories like Nigeria, Kenya, Ghana, and South Africa lead intra-Africa trade activity on the Paxful platform.
A new generation of bitcoin-fluent entrepreneurs
Over the years, Paxful has engaged many business owners who see a future for themselves in the crypto space. Beyond the big players, there are many ambitious up and coming bitcoin savvy business owners who focus on the African market.
An entrepreneur-born in Malawi, named Grey, helps consumers buy and sell bitcoin. He has managed to expand his business to employ staff that help consumers in Malawi to navigate the crypto space to better meet their financial needs. He also mentioned that many of his customers have limited access to credit cards, opting instead to buy bitcoin in order to purchase products and services on various e-commerce and streaming websites. Some of his customers will resell the products they buy for a profit.
Others will keep the products for personal use or send them to loved ones.
Some of Grey’s customers even use bitcoin to purchase cars from vendors in Japan for resell in various African countries. Interestingly most of his customers find him on social media and through messaging apps.
Social development organizations that operate in Africa like Zam Zam Water and Grow Educare Centres have also expanded their sights to include cryptocurrency in raising funds for their projects. Zam Zam Water has built schools and pays teacher salaries for communities in need in Rwanda with money raised in the bitcoin industry. Bitcoin funds raised by Grow Educare Centres has bought supplies – including books, stationery, and toys – for low-fee kindergartens that support disadvantaged communities.
“While African entrepreneurs continue to face many lingering challenges, we have seen first-hand on our platform how the opportunity to use technology and innovate can achieve greater financial inclusion as well as socio-economic development and job creation,” Ray Youseff, CEO and co-founder of Paxful.“As an African-born tech entrepreneur myself, my hope is that African governments, regulators and policymakers will create the right operating environment for the continent’s young Digi-entrepreneurs to succeed,” he added.