Web3 is the only way for the African continent to develop. Here’s why.
Let’s start by examining the macroeconomic picture and the overall state of African currencies, such as Nigeria’s naira, which has seen a 70% depreciation in the past eight years. This is bad news, given Nigeria is Africa’s largest economy.
We’ve also had huge inflation, due to weak and undervalued currencies across the continent. Another major problem is the current financial system, which does not work for Africa. It is too costly and far too time-consuming, with the World Bank confirming that sending money to Africa costs an average of 10% in fees. Financial exclusion is also high – with nearly 60 percent of the continent’s population without a bank account.
Africa’s booming young population
Despite all of this, there is hope for the future. One of the best things about Africa is the size of its youth population and its eagerness to embrace innovation and new ideas. 70% of Africa is under 30, and there is a booming tech scene – with Nigeria’s National Bureau of Statistics showing its technology sector outpaced its oil sector last year in terms of GDP contribution. This has created the perfect environment for digital assets, which has led to Nigeria, South Africa, and Kenya having the highest ownership of cryptocurrency per capita.
For Africa to thrive, we must embrace new technologies such as web3 to help us solve our pain points. These include – as I’ve mentioned – inflation, currency devaluation, and sending money back and forth. The pain points are deep, and so the potential solutions have the opportunity to change everything. While there are still many issues surrounding Web3, I firmly believe that Web3 needs Africa and not the other way around.
Expanding crypto adoption
In fact, I co-founded Cassava Network to help accelerate Web3 in Africa – I see it as leading the way for crypto adoption throughout the continent. Cassava offers rewards, entertainment and arts, and it has a digital identity, a multi-chain wallet, a rewards platform and an NFT marketplace, onboarding over 400,000 users so far.
The big vision is to aggregate the most extensive user base of African Web2 and Web3 users. Once we have aggregated that, not only do we become a bridge that connects Africans from Web2 to Web3 but also a bridge for African Web2 and Web3 users to move and access global Web3 companies. When we do that, we also become a bridge from these global web3 companies into Africa – which is the value we want to add to businesses.
I’m inspired by the tech scene in Africa, as African blockchain startups raised hefty figures in early 2022: $91 million in the first quarter alone, to be specific. Yes, those numbers have dropped recently. However, this is not just an issue for African startups but for startups worldwide. In the long run, as investors, we don’t care about valuation as much as we care about startups that build something adding value and solve pain points for everyday people.
Web3 solving painpoints
We remain very bullish on Africa, and my advice for African entrepreneurs is to focus on customers. Make their lives better by solving their pain points. At the same time, of course, watch your burn rate and focus on revenue. If you can do all of those things, you will be in a great position to take advantage of the blockchain revolution.
With disruption from innovators comes hesitation from regulators, and regulatory frameworks remain a challenge worldwide. Africa is no exception. However, we need to stop looking at the regulators as our enemies and look at them as friends. After all, we share the same goal: developing the African continent and its economies.
This is why we have to work with regulators to develop rules encouraging innovation and dissuading bad actors. Since this is such a nascent industry, unfortunately, some people have taken advantage of it and scammed people and that needs to be prevented in the future. However, in the long term, it is in everybody’s best interests to support rules that make sense for the greater good.
There remain some misconceptions about crypto and Web3, and it is important we continue educating as many people as possible about the realities of this new technology. This is why at Cassava Network, in everything we do, we have the consumer in mind. Most of our posts on social media, LinkedIn, and all the articles we publish are very focused on providing educational value. We have also signed a partnership with Pan Atlantic University to give blockchain courses and carry out joint research.
Overall, the future of Web3 in Africa is as bright as ever, and I am excited to see how new technologies will transform the continent in the coming decades. With the right investments, policies, and collaborations, there is no doubt that we can create a more inclusive, transparent, and prosperous future. The most important thing is that we continue to work together with our eyes on our shared goals.
Mouloukou Sanoh is the co-founder of Web3 platform Cassava Network and a leader committed to driving Web3 adoption in Africa. He is an Investment Manager at Adaverse and previously ran Mansa Capital, an investment advisory firm helping African startups raise funding.
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