In this rapidly evolving landscape, events serve as hubs of innovation, drawing together startups, funds, investors, and tech enthusiasts. These dynamic gatherings not only facilitate networking and knowledge sharing but also offer a front-row seat to witness the groundbreaking technologies originating from various corners of the world. This is even so for the HAQQ team who, in late September, had a valuable experience at ETHsafari in Kenya.
In their blog, they shared their observations about the East African crypto community, expressing great enthusiasm for the region’s incredible potential and dynamic nature. This excitement isn’t just empty words; it comes with a concrete plan.
HAQQ is dedicated to fostering promising projects and startups, fully supporting them through their startup lab, HAQQ Labs, which offers substantial ecosystem grants and incubation opportunities totaling $40 million.
According to the HAQQ team, their ambitions extend far beyond digital footprints in the eastern part of the continent. They aim to make a tangible impact by establishing a strong physical presence. Among their various plans for the region is to nurture innovation and support local talent through their HAQQ Labs and a hackathon collaborating with local players.
The East African blockchain and cryptocurrency ecosystem has seen rapid growth as local talents harness the power of Blockchain technology to address real-world issues and enhance livelihoods. For example, Kenya received $895 million in funding, according to a 2022 report, which was the largest in the continent.
However, while the lands in East Africa may be lush and vibrant with new beginnings, their counterparts in the Western part of Africa already offer low-hanging fruit with their massive population and opportunities.
What sets Nigeria apart in the global blockchain and cryptocurrency arena? This inquiry finds its answer in the massive trove of readily available data which speaks for itself.
According to a September 2023 Chainalysis report, Nigeria has achieved a remarkable second position in the top 20 of the global adoption index (for cryptocurrencies). On top of that, a report released by Crypto Valley Venture Capital (CV VC) revealed that Africa received an astounding $3.14 billion across 570 deals in 2022.
This represents a growth of 34% compared to the previous year, reaching an all-time high for the continent. Nigerian firms, in particular, managed to secure an impressive $563 million, positioning the country as the second-largest recipient of investments on the continent.
These figures serve as a clear indication of the confidence investors have in local enterprises. Coupled with Nigeria’s population of over 200 million people, an internet penetration rate exceeding 55% as of January 2023, a thriving developer community, and a substantial crypto user base, it is not surprising that Nigeria has emerged as an enticing destination for global players seeking to expand their presence.
While it is true that blockchain technology has vast applications across various industries, its most prominent influence lies within the realm of finance. Recent data highlights the significant remittance influx into Nigeria, surpassing an impressive $20 billion in 2022.
Furthermore, Chainalysis has reported a noteworthy 9% increase in cryptocurrency trading volume over the past year. This, coupled with the Nigerian Securities and Exchange Commission’s acknowledgment that young Nigerians are favoring cryptocurrency trading, clearly indicates the promising landscape and lucrative opportunities for market players to seize a substantial portion of the Nigerian market while bolstering remittance rates.
It is important to acknowledge that this growing interest in crypto products is primarily driven by pressing factors such as high inflation, rampant unemployment, and underemployment in a dynamic and educated population.
Speaking of Nigeria’s regulatory landscape, there have been some intriguing developments worth noting. Beyond the well-known restrictions imposed by the Central Bank on cryptocurrency transactions, there are other significant events happening.
Firstly, in 2020, the Nigerian Securities and Exchange Commission published its classification and treatment of cryptocurrencies. In 2021, the Central Bank took a deep dive into the world of Central Bank Digital Currency and introduced the eNaira.
Additionally, during the third quarter of 2022, Nigeria’s previous President Buhari signed the Startup Bill into law, aiming to create a bridge between startups and regulators. This bill intends to prevent detrimental regulations like the CBN’s prohibition on crypto from stifling the growth of startup companies.
In line with Gary Becker’s human capital theory, which proposes that individuals can increase their overall productivity by investing in education and skills training, the Nigerian government in May 2023, made a significant announcement: the launch of the National Blockchain Policy.
This policy aims to revolutionize the blockchain scene in the country, fostering its widespread adoption across public and private sectors. Alongside this initiative, the government agency NITDA initiated a training program, aiming to equip 500,000 Nigerians with blockchain skills.
Interestingly, the Ministry of Digital Economy revealed plans in October to leverage artificial intelligence to drive growth in the nation. The convergence of blockchain and artificial intelligence holds immense potential.
Considering Nigeria’s substantial youth population (over 50%) and an enthusiastic and receptive community interested in cryptocurrencies, the country presents an intriguing case that warrants exploration. Thus, the question arises again to the HAQQ team: Why not Nigeria?
