Since the beginning of the digital age, there have been several advances in the world of digital currency. From mobile banking apps to mining for cryptocurrency, the use of physical bills and coins is becoming less common. The potential of this new technology in developing countries, particularly for those in Africa, cannot be ignored. Here are four ways digital currency in Africa can improve the economy.

4 Ways Digital Currency in Africa Can Improve the Economy

  1. Transferring money is easier and faster when combined with technology. For those who cannot waste time waiting for money to travel from one location to another, digital currency in Africa would allow for conveniently instantaneous transfers. Additionally, more companies are taking notice of the strong potential market for digital currency in Africa and the positive impact it could have on citizens and businesses. Airtel Africa, a telecommunications company serving East, West and Central Africa, has recently partnered with Mukuru, an online remittance company, allowing Mukuru customers to instantly send money transfers directly to Airtel Money customers across 12 African countries. This means that people can make intra-Africa payments from Southern Africa, where Mukuru has a major presence, to other nations in Africa. Users would also benefit from no longer going to an agent to receive international payments physically. Once Airtel Money customers receive the money, they can use it to pay bills, purchase goods and services or even cash out at one of Airtel Africa’s branches or kiosks. This will allow African citizens to get the most out of their money.
  2. Managing personal income leads to greater financial literacy. As the use of digital currency spreads, people are increasingly exposed to the language of business as well as standard banking practices. For those living in countries with low financial literacy rates, this could be the difference between economic stability and poverty. The implications of digital technology in Africa are astronomical due to the previous lack of education on these financial principles across the continent. In Somalia, the current rate of financial literacy is estimated to be 15%. On the other side of the spectrum, Botswana has a rate of over 51%—the highest in all of Africa. With this first-hand knowledge, more people will be able to learn how to manage their finances properly.
  3. Digital currency allows for more connections between African citizens and the rest of the world. The use of digital money transfers not only allows those living in Africa to pay and request money from people within their continent but also those around the world. With the recent partnership between Airtel Africa and Mukuru, small business owners in Africa can now establish business relationships with people in Europe, Asia and the United States, among others. As these relationships continue to grow, the digital currency can flow freely between Africa and the rest of the world, opening the continent up to high-dollar investments from more developed regions and, in time, lead to a potential rise in the African economy.
  4. More women have access to their finances. Only 37% of women in Sub-Saharan Africa have a bank account compared to 48% of men—a gap that has only widened in the past few years. The numbers are worse in North Africa, with around two-thirds of the adult population remaining unbanked and the gender gap for access to financial education standing at an 18% difference, the largest in the world. However, with the rise of digital technology in Africa, more women can become empowered and take control of their finances. Female entrepreneurs rarely apply for loans as a result of low financial literacy, risk aversion and fear of losing their businesses. If these women were to utilize digital banking technology, they would be able to pay employees, investors and, most importantly, themselves more efficiently. As more and more women manage their finances, they will be able to lift themselves out of poverty and strengthen their local economies.

As digital currency in Africa continues to flourish, more entrepreneurs, families and willing investors will be able to witness the rise of the African economy. Money transfers and online banking will likely support the growing economy as it joins the rest of the world in the technology age. With continued global support, African citizens will be able to lift their economy to new heights.

Daniela Canales
Photo: Flickr

L'Afrique Excelle
It is a common misconception that technological advancements in Africa are far behind the rest of the world. However, African developers are working to modernize the continent with the resources they have available, as well as with the help of large, digital businesses like L’Afrique Excelle. L’Afrique Excelle is a francophone organization that exceeds in aiding entrepreneurs in anglophone and francophone countries, as well as providing support for African countries that are less developed technologically.

The Work of L’Afrique Excelle

L’Afrique Excelle works to encourage its startups to find tech solutions for the African market designed to expand and increase access to services for the general public. Powered by the World Bank, the organization has supported several startups spearheaded by technological entrepreneurs in francophone and anglophone countries in Africa. The organization offers a series of commodities including:
  • access to Capital
  • mentorship
  • XL Academy
  • Mali Residency
  • France Residency
  • exposure

L’Afrique Excelle has supported new startups in raising up to five million dollars in funding from investors. The company has also connected startups with leading investors. Additionally, new startups can receive a one-week all-expenses-paid residency in Bamako and an all-expenses-paid residency to Paris including a showcase at VivaTech. These opportunities help new brands increase visibility and raise awareness.

Striking Benefits of Technological Advancements in Africa

L’Afrique Excelle is not the only organization currently aiding the development of technology in Africa. Digital Africa, a French-based development company, is working to increase investment funds in Nigeria, Kenya, South Africa and beyond. All of the startup companies that work with Digital Africa will also have the chance to showcase at the Francophone Africa Investor Summit (FAIS), an event that takes place in West Africa for early-stage investors.

The World Bank is helping advance startup companies in African countries that will have widespread benefits. The increase in capital will allow for improved systems of health care, transportation, data analytics and software. These developments will allow African countries to improve not only technologically, but also economically and socially with an overall improvement in infrastructure.

Current Progress and Future Outlook

More than 900 applicants entered the L’Afrique Excelle startup initiative, and the 20 most promising startups involved transportation, health care, education, human resources and B2B. Some of these startups included Aerobotics (data), Electronic Settlement Listed (FinTech), Lynk Jobs Ltd. (human resources), MAX (transportation), Prepclass (education technology) and Ongair (SME services).

These businesses and investors, expanding from Cape Town to Cairo, will be working hard to innovate new and improved ways of solving Africa’s most pressing issues. According to African Law & Business (ALB), some of Africa’s most prominent issues as of 2019 include low access to world-class computing, low rates of developmental finance, governmental corruption, climate change, energy and business. L’Afrique Excelle’s mission to enhance the growth of digital businesses in Africa will help limit these problems and improve the standard living in Africa.

– Sara Devoe
Photo: Pixabay