A report published by EMURGO Africa and PwC shows that Web3 technologies are becoming more widely adopted in Africa. A separate report from EMURGO Africa highlighted that Big Tech companies have actively contributed to the widespread adoption of Web3 technologies across the continent.
KASI Insight reported that more than 66% of African consumers surveyed had heard of crypto, with only about 18% of respondents claiming to have heard about crypto for the first time during the survey. Africa’s share of global blockchain deals rose from 1.2% to 1.3% in 2023 and then rose to a record high of 1.8% in the first half of 2024.
African blockchain companies raised $34.7 million across 12 deals, representing a 9% increase in the first half of 2024. Year-over-year funding increased by 125%, while the number of deals increased by 700 in the second quarter of 2024 % increased.
Consumer habits and attitudes provide a window into Web3 adoption in Africa and emerging markets
In a ConsenSys survey on crypto awareness in Africa and emerging markets, the percentage of respondents who claimed to understand cryptocurrencies was much higher in Nigeria (78%), South Korea (63%), South Africa (61%), Brazil (59% ). %), and India (56%). In Japan and Indonesia they were much lower, with only 1 in 3 confirming they had knowledge of crypto.
Afcacia.io claimed that cross-border crypto payments registered growing demand in Africa, driving the adoption of blockchain technology. Lower transaction costs were the main driver of the seismic shift to Web3 platforms, especially among middle-class African users. A Data Mynt report confirmed that fees charged for cross-border payments in Africa are the highest globally, with an average fee of 8.9% of the transaction value. The data showed that the global average cost of cross-border payments was 6.8%.
Nearly 10% of African financial transactions were digital, with Nigeria, South Africa, Egypt and Kenya accounting for 66% of the digital revolution.
GameFi too experienced significant growth in Africa, fueled by lower mobile internet costs, greater access to smartphones and a young, tech-savvy population. Ethiopia, Kenya, Nigeria and South Africa were the top GameFi markets in Africa, with play-to-ear games being the core concepts. Smartphone gaming accounts for 92% of all gamers, with at least 63% of gamers having paid for gaming services. The GameFi market on the continent was expected to reach $1 billion by the end of 2024.
Researchers investigate the state of Web3 in Africa
Chainalysis data shows that the cryptocurrency market in Africa grew by over 1,200% between 2020 and 2021, with Tanzania, Kenya and South Africa among the top 20 in crypto adoption. Nigeria, Kenya and South Africa received more than 70% of Africa’s blockchain funding in 2021. Blockchain venture funding growth was eleven times greater looking at 2021 and the first quarter of 2022.
The potential areas of application for blockchain technology in Africa included SME financing, supply chain, governance, smart contracts for informal labor markets, registration of title deeds, mobility, verification of education credentials and digitization of trade infrastructure.
Kenya had a high crypto adoption rate and as of 2021 ranked fifth globally in crypto ownership as a percentage of the country’s total population.
In 2021, CBN Governor Godwin Emeiele noted that the eNaira had reached over 840,000 downloads, with nearly 270,000 active wallets, comprising over 250,000 consumer wallets and about 17,000 merchant wallets since the eNaira was launched. Furthermore, the volume and value of transactions on the eNaira platform reached over 200,000 and $9 million (4 billion Naira) respectively.
In South Africa, Web3 was characterized by the increasing use of machine learning technologies and AI to improve process automation and user experiences. A major emerging trend has been the use of dApps and blockchain technology in the agricultural sector to trace and track the origin of products to ensure food safety and transparency of supply chains.
According to Afcacia.io, major US fintechs such as Coinbase, Block, ConsenSys and Circle are likely to expand their operations into Africa through partnerships with local Web3 platforms. The report shows that remittances in Sub-Saharan Africa represent 1.3% of GDP. Transaction value grew 5.2% year-on-year to $53 billion in 2022.