Africa’s solarized digitalization agenda in the time of coronavirus


The seventh session of the Africa Regional Forum on Sustainable Development convened earlier this month with the theme “Building forward better: Towards a resilient and green Africa to achieve the 2030 Agenda and Agenda 2063” and to advertise the financial, social and environmental dimensions of sustainable improvement.

Amina Mohammed, deputy secretary-general of the United Nations, pointed out that growing a simply, truthful financial mannequin that embraces inexperienced and renewable vitality, resilient infrastructure, and digitalization — whereas defending pure assets by broadening partnerships for science, know-how and innovation — might unleash the area’s inexperienced potential and gasoline financial transformation.

UNECA’s digital agenda

According to a paper titled “Harnessing Emerging Technologies: the cases of Artificial Intelligence and Nanotechnology,” which was supplied by Victor Konde — scientific affairs officer at the United Nations: “The global pandemic caused by [COVID-19] has highlighted the importance of technology and innovation in developed countries. […] Digital technologies have transformed how people work, interact and access services.” It additionally highlights the “interest in the role of emerging technologies in driving Africa’s transformation” and in reaching the UN’s Sustainable Development Goals.

As the doc states, the United Nations Economic Commission for Africa, or UNECA, carried out profound coverage analysis and “provided policy advice to member States on several emerging technologies, such as blockchain, artificial intelligence and nanotechnology.” The paper continues:

“The digital economy is unpinned by several key technologies, some of which include artificial intelligence (AI), cloud computing, blockchain, Internet of Things (IoT), virtual reality, and augmented reality. However, as UNCTAD noted, China and United States currently own 75% of patents on blockchain, account for half of global spending on IoT and their firms accounts for three quarters of the global market of commercial cloud computing. As a result, China and the United States account for 90% of the 70 largest digital platforms while Africa and Latin America account for a combined share of about one percent (1%).”

The web and tech giants, similar to Google and Facebook, spend billions of {dollars} in an try and get extra individuals online in Africa regardless of a backlash from governments which might be attempting to close down entry to those providers. At the identical time, Vera Songwe, UN under-secretary-general and govt secretary of the Economic Commission for Africa, pointed out:

“Africa could expand its economy by a staggering $1.5 trillion dollars, by capturing just 10% of the speedily growing artificial intelligence (AI) market, set to reach $15.7 trillion by 2030.”

Digital currencies in Africa

Africa is the second-largest continent in the world in phrases of each territory and inhabitants (roughly 1.3 billion people), and cryptocurrency is in huge demand for the following causes:

  • Countries’ nationwide fiat currencies are weak to double-digit hyperinflation, in response to the UN.
  • Africa has a excessive unbanked inhabitants, a excessive penetration of smartphone use and an more and more younger, migrating inhabitants.

During 2020, month-to-month cryptocurrency transfers underneath $10,000 in worth to and from Africa — usually traded person-to-person throughout the 816 million cellular phones in Sub-Saharan Africa alone — skyrocketed 55%, “reaching a peak of $316 million in June.” They traded with a big margin that reached up to 70% on account of the small quantity of cryptocurrency retailers. Individual residents and small companies situated in Nigeria, South Africa and Kenya accounted for many of this buying and selling exercise.

China is the largest buying and selling companion of many African international locations. It has been investing ($45 billion in 2019, in response to the United Nations Conference on Trade and Development) since the mid-2000s into Africa’s know-how, communications and finance infrastructure, and blockchain know-how training. Already, Egypt, Kenya, Rwanda and Eswatini have been researching central financial institution digital currencies, or CBDCs. As a BRICS nation, South Africa is piloting one as half of Russia’s multinational digital currency initiative that will probably be linked with China’s cellular Digital Currency Electronic Payment system supported by its Blockchain-based Service Network.

Related: Not like before: Digital currencies debut amid COVID-19

Nigeria is the world’s second-largest BTC market

In its “Nigeria Digital Economy Diagnostic Report” of 2019, the World Bank laid out the nation’s digital financial system potential. Only a yr later, amid the COVID-19 pandemic, Nigeria surpassed China and at present ranks second in the world in Bitcoin (BTC) buying and selling, though it lacks the regulatory framework to assist the digital asset enterprise exercise.

Bitcoin buying and selling offers a supply of earnings for an rising quantity of unemployed younger individuals in addition to a method of sending and receiving cross-border funds. For instance, BTC funded the 2020 #EndSARS protests against police brutality, which have been carried out by younger individuals nationwide and unfold past Nigerian borders, parallel to solidarity protests in completely different components of the world.

Recently, the Central Bank of Nigeria banned banks from servicing crypto exchanges and is incentivizing residents till May 8 to make use of licensed worldwide cash switch operators for cross-border funds. Nigeria’s securities regulator adopted go well with by suspending its planned regulatory framework for digital property. This ban is anticipated to be in place until a well-devised concrete regulatory framework for the $1.8 trillion cryptocurrency market is developed, maybe one that comes with the Nigerian Technology Industry Group’s core coverage suggestions of instituting Know Your Customer, Anti-Money Laundering and Combating the Financing of Terrorism rules. As the chairman of the Economic and Financial Crimes Commission, Abdulrasheed Bawa, explained:

“We are going to digitalise our processes and we are going to create a new full-pledged directorate of intelligence to enable us gather intelligence so that we will be proactive in our fight against economic and financial crimes and by so doing we will also provide the government with necessary quality advice that will lead to good governance.”

Related: South African president steps down as banks embrace blockchain technology

The photo voltaic vitality potential of Africa

Africa has plentiful vitality resources, together with photo voltaic vitality, because it receives extra hours of vivid sunshine throughout the course of the yr than every other continent. But it lacks dependable entry to fashionable vitality, which is required for digitalization.

The continent is determined to green-energize and solarize its digitalization, as it’s most weak to the impacts of local weather change, though it contributes minimally to CO2 emissions. With the exception of Eritrea and Libya, African international locations have ratified the Paris Agreement with bold nationally decided contributions.

According to forecasts by the International Renewable Energy Agency, “With the right policies, regulation, governance and access to financial markets, sub-Saharan Africa could meet up to 67 per cent of its energy needs [from renewables] by 2030.” And as identified by Songwe, it will probably “provide access to energy to over 70 per cent of Africans who are without access currently.”

Egypt is leading regional efforts to transition to inexperienced/photo voltaic vitality, with the continent experiencing a surge of progress in new photo voltaic installations, primarily driven by 9 international locations. In a first-of-its-kind challenge, Egypt not too long ago entered right into a three way partnership with a Chinese firm to domestically manufacture sand-to-cell photovoltaic photo voltaic panels, with China having ramped up its abroad inexperienced funding to 57% underneath the Belt and Road Initiative, in response to analysis from the International Institute of Green Finance.

Conclusion

The nationwide lockdowns and worldwide journey bans imposed consequently of the COVID-19 pandemic have accelerated inexperienced digitalization efforts throughout African markets, which have promoted democracy and cryptocurrencies and damaged down geographic obstacles to collaboration and distribution. Nigerian songwriter and singer Burna Boy, along with his music, and Ghanaian artist Amoako Boafo, along with his work, conquered the world throughout 2020.

Accordingly, the UN has devoted the entire yr of 2021 to the inventive financial system, because it performs a vital position in selling sustainable improvement for a inexperienced restoration from the COVID-19 pandemic. A sustainable inexperienced restoration plan necessitates understanding the hyperlinks between local weather change, well being and inequality, and it requires implementing bold local weather change insurance policies that align with the Paris Agreement. More necessary than ever, these targets present a vital framework for a inexperienced COVID-19 restoration. The 12 artwork reveals exhibited at the seventh session of the Africa Regional Forum on Sustainable Development convention mirrored these themes.

The views, ideas and opinions expressed listed below are the creator’s alone and don’t essentially replicate or symbolize the views and opinions of Cointelegraph.

Quotes in this text taken from beforehand printed sources have been frivolously edited.

Selva Ozelli, Esq., CPA, is a world tax legal professional and authorized public accountant who often writes about tax, authorized and accounting points for Tax Notes, Bloomberg BNA, different publications and the OECD.