While nearly one in two Nigerians are excluded from the traditional banking system, the development of cryptocurrencies could change that.
It is a well-known fact today that the African continent is the mobile phone champion. US telecommunications infrastructure maker Cisco confirmed this again in its latest report: Mobile data traffic in Africa grew by 96% in 2016, the highest in the world, compared with 52% in Western Europe. It is by betting on this dynamic that innovators from East Africa have succeeded in replacing the central banking system of the West, in which a large part of the population has been excluded.
As proof, the M-Pesa remittance service, created by Kenyan mobile operator Safaricom in 2007, has achieved remarkable success: in May 2017, Kenya’s total population was about 49 million, or more than half of the country’s population, with 2,600 Thousands of Kenyans using the service. This evolution of Kenya’s economy has made it possible for its residents to access the same services as those integrated into the global banking system via their mobile phones.
What about in West Africa? Awakening is slower in this region. According to a 2012 report by Ecofin, the African economic and financial information agency, the centralization of the Central Bank of Nigeria (CBN) and lack of proximity to banking services excluded nearly one in two (46.6%) residents. The latest remittance measures introduced by CBN in early summer 2016 are unlikely to improve the situation. By limiting competition for money transfer services to just three operators — Western Union, Ria and MoneyGram — it has pushed up the cost of transferring money. According to the latest data from the World Bank, although remittances account for 26% of the country’s gross domestic product (GDP).
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Solutions must come through mobile devices, not central banks. The thoughts of Tim Akindo and his colleague Deji Adewunmi, two Nigerians aged 25 and 27? Use Bitcoin. In short, this payment method allows fast and very economical remittances (just a few cents) anywhere in the connected world. Good news for the first African country to benefit from diaspora remittances. Another advantage is that cryptocurrency is decentralized, “it doesn’t belong to anyone, it’s just a universal tool, just like the internet. Its governance is ensured by all users,”explained Manuel Valente, director of Bitcoin House in Paris. Dao. Its money supply is strictly limited to 21 million bitcoins, avoiding any possibility of hyperinflation. This is what has led to the severe recession Nigeria has suffered in recent years.
“Bitcoin is widely used in the US and some European countries, but in Africa the gap is alarming. Only South Africa, Kenya and Ghana are interested and they are right. This is an incredible technology, and Africans need to take advantage of it,”explains Tim Akindo. On October 15th, together with his colleagues, they launched Tanjalo, an online platform for buying and selling bitcoins very easily. All you need is a phone and an internet connection. Their motto: Provide access to cryptocurrencies “as easy as sending an email”. Tanjalo must support the flow of money to anyone, anywhere. “African people are not fortunate to be integrated into the global banking and financial system. It is up to us Africans to create this opportunity.»
For the crowd who are already very good at electronic wallets, this operation is not complicated. All you have to do is top up your mobile account (via MTN, Airtel, Etisalat, GLO, etc.) and convert your Naira balance to Bitcoin. As an indication, on December 1, one Bitcoin was equal to 3,504,982 Naira.
Instead, Nigerian expats can send funds in bitcoin, which can be converted into naira (at a lower cost compared to traditional operators), or used as-is for online purchases by the recipient. It’s even possible to top up his mobile plan, as the country’s major phone services accept bitcoin. Tanjalo’s co-founders even hope that brick-and-mortar points of sale, especially in Lagos, will be able to quickly accept this payment method. For him, there is no doubt that “Bitcoin is the real solution to the problems that arise here.”