- March 20, 2021
- Posted by: admin
- Category: BitCoin, Blockchain, Cryptocurrency, Investments
The COVID-19 pandemic has highlighted the necessity for the digitalization and sustainable development of African economies.
The seventh session of the Africa Regional Forum on Sustainable Development convened earlier this month with the theme “Building forward better: Towards a resilient and green Africa to achieve the 2030 Agenda and Agenda 2063” and to promote the economic, social and environmental dimensions of sustainable development.
Amina Mohammed, deputy secretary-general of the United Nations, pointed out that developing a just, fair economic model that embraces green and renewable energy, resilient infrastructure, and digitalization — while protecting natural resources by broadening partnerships for science, technology and innovation — could unleash the region’s green potential and fuel economic transformation.
UNECA’s digital agenda
According to a paper titled “Harnessing Emerging Technologies: the cases of Artificial Intelligence and Nanotechnology,” which was provided by Victor Konde — scientific affairs officer at the United Nations: “The global pandemic caused by [COVID-19] has highlighted the importance of technology and innovation in developed countries. […] Digital technologies have transformed how people work, interact and access services.” It also highlights the “interest in the role of emerging technologies in driving Africa’s transformation” and in achieving the UN’s Sustainable Development Goals.
As the document states, the United Nations Economic Commission for Africa, or UNECA, conducted profound policy research and “provided policy advice to member States on several emerging technologies, such as blockchain, artificial intelligence and nanotechnology.” The paper continues:
“The digital economy is unpinned by several key technologies, some of which include artificial intelligence (AI), cloud computing, blockchain, Internet of Things (IoT), virtual reality, and augmented reality. However, as UNCTAD noted, China and United States currently own 75% of patents on blockchain, account for half of global spending on IoT and their firms accounts for three quarters of the global market of commercial cloud computing. As a result, China and the United States account for 90% of the 70 largest digital platforms while Africa and Latin America account for a combined share of about one percent (1%).”
The internet and tech giants, such as Google and Facebook, spend billions of dollars in an attempt to get more people online in Africa despite a backlash from governments that are trying to shut down access to these services. At the same time, Vera Songwe, UN under-secretary-general and executive secretary of the Economic Commission for Africa, pointed out:
“Africa could expand its economy by a staggering $1.5 trillion dollars, by capturing just 10% of the speedily growing artificial intelligence (AI) market, set to reach $15.7 trillion by 2030.”
Digital currencies in Africa
Africa is the second-largest continent in the world in terms of both territory and population (roughly 1.3 billion people), and cryptocurrency is in big demand for the following reasons:
- Countries’ national fiat currencies are vulnerable to double-digit hyperinflation, according to the UN.
- Africa has a high unbanked population, a high penetration of smartphone use and an increasingly young, migrating population.
During 2020, monthly cryptocurrency transfers under $10,000 in value to and from Africa — often traded person-to-person across the 816 million mobile phones in Sub-Saharan Africa alone — skyrocketed 55%, “reaching a peak of $316 million in June.” They traded with a large margin that reached up to 70% due to the small number of cryptocurrency retailers. Individual citizens and small businesses located in Nigeria, South Africa and Kenya accounted for most of this trading activity.
China is the largest trading partner of many African countries. It has been investing ($45 billion in 2019, according to the United Nations Conference on Trade and Development) since the mid-2000s into Africa’s technology, communications and finance infrastructure, and blockchain technology education. Already, Egypt, Kenya, Rwanda and Eswatini have been researching central bank digital currencies, or CBDCs. As a BRICS nation, South Africa is piloting one as part of Russia’s multinational digital currency initiative that will be linked with China’s mobile Digital Currency Electronic Payment system supported by its Blockchain-based Service Network.
Related: Not like before: Digital currencies debut amid COVID-19
Nigeria is the world’s second-largest BTC market
In its “Nigeria Digital Economy Diagnostic Report” of 2019, the World Bank laid out the country’s digital economy potential. Only a year later, amid the COVID-19 pandemic, Nigeria surpassed China and currently ranks second in the world in Bitcoin (BTC) trading, even though it lacks the regulatory framework to support the digital asset business activity.
Bitcoin trading provides a source of income for an increasing number of unemployed young people in addition to a means of sending and receiving cross-border payments. For example, BTC funded the 2020 #EndSARS protests against police brutality, which were carried out by young people nationwide and spread beyond Nigerian borders, parallel to solidarity protests in different parts of the world.
Recently, the Central Bank of Nigeria banned banks from servicing crypto exchanges and is incentivizing citizens until May 8 to use licensed international money transfer operators for cross-border payments. Nigeria’s securities regulator followed suit by suspending its planned regulatory framework for digital assets. This ban is expected to be in place until a well-devised concrete regulatory framework for the $1.8 trillion cryptocurrency market is developed, perhaps one that incorporates the Nigerian Technology Industry Group’s core policy suggestions of instituting Know Your Customer, Anti-Money Laundering and Combating the Financing of Terrorism regulations. As the chairman of the Economic and Financial Crimes Commission, Abdulrasheed Bawa, explained:
“We are going to digitalise our processes and we are going to create a new full-pledged directorate of intelligence to enable us gather intelligence so that we will be proactive in our fight against economic and financial crimes and by so doing we will also provide the government with necessary quality advice that will lead to good governance.”
Related: South African president steps down as banks embrace blockchain technology
The solar energy potential of Africa
Africa has abundant energy resources, including solar energy, as it receives more hours of bright sunshine during the course of the year than any other continent. But it lacks reliable access to modern energy, which is needed for digitalization.
The continent is determined to green-energize and solarize its digitalization, as it is most vulnerable to the impacts of climate change, even though it contributes minimally to CO2 emissions. With the exception of Eritrea and Libya, African countries have ratified the Paris Agreement with ambitious nationally determined contributions.
According to forecasts by the International Renewable Energy Agency, “With the right policies, regulation, governance and access to financial markets, sub-Saharan Africa could meet up to 67 per cent of its energy needs [from renewables] by 2030.” And as pointed out by Songwe, it can “provide access to energy to over 70 per cent of Africans who are without access currently.”
Egypt is leading regional efforts to transition to green/solar energy, with the continent experiencing a surge of growth in new solar installations, mainly driven by nine countries. In a first-of-its-kind project, Egypt recently entered into a joint venture with a Chinese company to locally manufacture sand-to-cell photovoltaic solar panels, with China having ramped up its overseas green investment to 57% under the Belt and Road Initiative, according to research from the International Institute of Green Finance.
Conclusion
The national lockdowns and international travel bans imposed as a result of the COVID-19 pandemic have accelerated green digitalization efforts across African markets, which have promoted democracy and cryptocurrencies and broken down geographic barriers to collaboration and distribution. Nigerian songwriter and singer Burna Boy, with his music, and Ghanaian artist Amoako Boafo, with his paintings, conquered the world during 2020.
Accordingly, the UN has dedicated the whole year of 2021 to the creative economy, as it plays a critical role in promoting sustainable development for a green recovery from the COVID-19 pandemic. A sustainable green recovery plan necessitates understanding the links between climate change, health and inequality, and it requires implementing ambitious climate change policies that align with the Paris Agreement. More important than ever, these goals provide a critical framework for a green COVID-19 recovery. The 12 art shows exhibited at the seventh session of the Africa Regional Forum on Sustainable Development conference reflected these themes.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Quotes in this article taken from previously published sources have been lightly edited.
