TechCabal Daily – Fasten your seat belts

NIGCOMSAT-1R is a geo satellite of the Nigerian Communications Satellite Ltd. which, 14 years after its launch, is yet to prove its viability. Since 2009, more than US$11 million has been allocated to the communications company with 90% of it going towards capital expenses and salaries. This is excluding capital investments and loans taken to launch the satellite twice, first in 2008 and again in 2011 after a power failure had caused the first launch to fail.

Industry stakeholders point to the pricing of NigComSat as discouraging and foreign service providers are still the go-to for satellite communication needs. The government’s running of the organisation as well as infrastructure deficits have also been blamed for the troubles at NigComSat.

While the satellite through which the SBAS signal will be transmitted will expire in 2026, there has been talks about financing and constructing two new backup satellites with China.

Crypto adoption is rising rapidly across Sub-Saharan Africa. Word of mouth, just like my friend trying to convince me, is one of the ways the technology is spreading across the continent. But there’s more.

Last month, peer-to-peer bitcoin trading volume hit $$18.3 million in Sub-Saharan, its highest ever recorded in a week. Nigeria, Kenya and South Africa were the top locations with $9.8 million, $3.2 million and $2.8 million respectively.

[The Next Wave: The crypto of Africa]

Investors are voting with their money. There have been at least 3 major crypto deals in the past few weeks. At least two of those deal were linked to companies whose primary market is Nigeria or have significant operations here.

[TC Insights: Crypto Wars]

So what is driving Nigeria’s crypto growth and making it the region’s crypto capital?

Nigeria has one of the highest unemployment rates in Africa. But what is even more instructive is that when you calculate the actual number of unemployed people, the picture looks grimmer. Nigeria’s high population means that its unemployed population at 27.1% is 27 million, way higher than South Africa’s 7.1 million people even though the latter’s unemployment rate is 30.1%.

This means there are far more people in Nigeria who urgently need a means to make money and to make ends meet. Many see crypto as one way to invest and earn.

Another major use case of crypto is to navigate the complicated international payment system, especially between Africa and other regions. Businesses are using it to pay contractors abroad.

Nigeria has the second-highest import volume in Sub-Saharan Africa. Using 2019 figures, it imported about $47.3 billion worth of goods compared to South Africa’s $88.2 billion. A slice of the import volume in both countries is now going through crypto exchanges.

However, despite the growth in crypto, its potential is still limited across the continent. Over 60% of regulators are yet to clarify their stance on it and there’s a lack of crypto infrastructure in Africa. Only 20 of the 10,267 bitcoin nodes worldwide are in Africa. Another limitation is the growing reduction in disposable income, especially in the midst of the pandemic.

Despite growth, Africa has not scratched the surface in its crypto potential.

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