The eradication of poverty in third-world countries has been a major concern to the world at large. According to the statistics released by Statista in 2022, 50% of rural residents in Africa live in extreme poverty, compared to 10% in urban areas. Despite many majors adopted by foreign bodies including the 17 Sustainable Development Goals Agenda founded by the United Nations, they all seem to be slow or ineffective.

But from the statement made by GT Igwe Chrisent, the CEO of SumoTrust, an online saving and investment platform. He said Africa's blockchain journey must first begin with poverty alleviation. He stressed that without fixing this, the adoption of blockchain technology will be impeded since economic stability is a key factor for the wide adoption of blockchain in Africa. He made this statement while in the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) Digital Asset Summit 2023, held in Abuja.

However, amid the poverty challenge, African countries especially Nigeria record to be the most active in the adoption of blockchain technology. Now the big question is, with the unending interest of Africans in Blockchain can this technology aid financial freedom even at the grassroots level?

In this article, we will find out as I have assembled the possible ways in which blockchain can boost financial freedom in Africa.

What Is Blockchain Technology

First, before we delve into the subject matter, let's get to know what blockchain technology is.

In simple terms, blockchain technology is an advanced technology that consists of a chain of blocks, each with a set of data to record transactions across many computers in such a way that it is impossible to alter them. By its nature, blockchain is immutable, decentralized, and capable of being distributed.

The Significance Of Blockchain Technology In Africa

As Africa aspires to ascend the growth ladder, blockchain technology remains a crucial subject matter. Considering the global financial markets crises, restricted banking access, and the high rate of corruption, blockchain emerges as a headway to tackle all these challenges in Africa. While experts describe blockchain technology as the "next big thing", its widespread adoption across sub-Saharan Africa, Nigeria, Kenya, South Africa, and Ghana is a testament to its significance when it comes to economic growth.

Considering its offer for a more effective payment system in the continent, blockchain is analyzed to facilitate intercontinental commerce among African countries as it eliminates currency barriers. The centralization of power on bodies like banks has limited the transaction and collaboration of countries as regulations are placed to cut the free flow of cash. However, with the blockchain's decentralized features, transactions are done without intermediary bodies, making the process faster and more efficient.

While epileptic power supply has been a challenge in some parts of Africa like Nigeria, the adoption of blockchain is perceived as a way out. Owing to the centralized government system, energy financing, and distribution are often time siphoned by individuals, but thanks to Energy ICOs, like Ethereum-based ImpactPPA, which allow individual investors to finance and fasten the global production of clean energy, and the tokenization of energy generation. By achieving a constant power supply, there is a high expectation for an economic boost.

Research shows that 70% of Africans are dependent on agriculture for survival. The fact here is that, whether directly or indirectly, everyone, both animals depend on agricultural produce. This shows how essential the sector is to human existence because its growth is directly proportional to food security, healthy living, industrialization, and intra-Africa trade, among others. In this regard, companies like BeefLedger SA already use blockchain to verify and trace the authenticity of beef products aimed at ensuring food safety in the supply chain.

There are many use cases of blockchain technology as it concerns Africa's economy. Now let's look at the possible ways blockchain can alleviate poverty.

Possible Ways In Which Blockchain Technology Aids Financial Freedom In Africa

Financing of Tech Startups/ Entrepreneurial Ideas

According to the report released by Emurgo Africa, blockchain funding between 2021 and 2022 has risen by 1,668%, revealing that blockchain adoption in Africa is the fastest in the world. With the increasing number of startups springing up every day, to solve the region's challenges, it is correct to say that Africa is the next blockchain hub. Hence, as the number of startups rises, so does the number of jobs available to Africans. This automatically implies fast circulation of money, thereby leading to more money in the hands of people.

From the report released by CV VC, titled "The African Blockchain Report 2021, Blockchain startup was highlighted to raise $91 million in Q1 of 2022, with fintech topping the chart. The support of blockchain startups has proven successful and all thanks to companies like Adanian Labs and emerging NODO which are here to accelerate the growth of financial freedom in Africa in their mission to provide grants.

Advancement In Financial Inclusion

Financial inclusion is one key way to minimize poverty and it is an essential ingredient for the economic success of a nation. It bridges the gap between the rich and the poor. In most rural areas, access to banking systems has been a challenge, but with blockchain tech, the bank is within your reach (right on your mobile phone).

With the increasing number of mobile tech adoption, coupled with the growing population of tech-savvy, the use of cryptocurrencies in Africa is more visible. Aside from the quick access to the banking system, it curtails the erection of banking infrastructure, thereby channeling the proposed funds into other essential sectors.

As blockchain technology adoption gradually increases, platforms like M-Pesa, used by Kenyans, have successfully penetrated the African market, serving as a digital payment platform to millions of users.

Elimination Of Fraud and Corruption

Corruption and fraud hold a great portion of the poverty rating of a country. Misuse of funds or siphoning of public funds is a red flag for any country that seeks development. While Africa suffers this a lot, the adoption of blockchain technology proves to be a solution as every transaction recorded remains immutable.

By guaranteeing transparency and traceability throughout the supply chain, there will be no room for bribery and favoritism since contracts will be awarded based on merit and observed throughout the execution period. It will enforce accountability in every parastatal thereby building trust among people.

Final Thoughts:

Eradicating poverty in Africa is a necessity for technological advancement. There is no doubt that with blockchain technology, the long-awaited need of Africans has come to remain. Through startup support, financial inclusion, and corruption exclusion, there is a high expectation that blockchain can set Africa free from the hardship of poverty. Promote blockchain today and embrace the future we all waited for.

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