Earlier this month, the seventh session of the African Regional Forum on Sustainable Development was held under the theme A Better Future: Towards a resilient and green Africa to achieve Agenda 2030 and Agenda 2063 and promote the integration of the economic, social and environmental dimensions of sustainable development.
Amina Mohammed, UN Deputy Secretary-General, noted that the development of an equitable economic model that incorporates clean and renewable energy, resilient infrastructure and digitalization – while protecting natural resources through comprehensive science, technology and innovation partnerships – could unlock the region’s environmental potential and drive economic transformation.
ECA Digital Agenda
According to the article Using Emerging Technologies: The case of artificial intelligence and nanotechnology by Victor Conde, UN chief scientist: The global pandemic caused by [COPID-19] has highlighted the importance of technology and innovation in developed countries. Digital technology has changed the way people work, interact and access services. It also highlights the role of new technologies in driving change in Africa and achieving the UN Sustainable Development Goals.
As noted in the document, the United Nations Economic Commission for Africa (ECA) has conducted extensive policy research and advised member states on a range of emerging technologies, including blockchain, artificial intelligence and nanotechnology. The document continues:
The digital economy is not based on several key technologies, including artificial intelligence (AI), cloud computing, blockchain, the Internet of Things (IoT), virtual reality and augmented reality. But as UNCTAD has noted, China and the United States currently hold 75 percent of blockchain patents, account for half of global IoT spending, and their companies account for three-quarters of the global commercial cloud computing market. For example, China and the United States account for 90% of the top 70 digital platforms, while Africa and Latin America together account for about 1%.
Internet and technology giants like Google and Facebook are spending billions of dollars to connect more people in Africa, despite governments trying to cut off access to these services. Vera Songwe, UN Deputy Secretary-General and Executive Secretary of the Economic Commission for Africa, meanwhile, noted:
Africa can add $1.5 trillion to its economy if it captures even 10% of the rapidly growing artificial intelligence (AI) market, which is expected to reach $15.7 trillion by 2030.
Digital currencies in Africa
Africa is the second largest continent in the world, both in terms of territory and population (approximately 1.3 billion people), and cryptocurrencies are in high demand there for the following reasons:
- According to the UN, the national currencies of these countries are subject to double-digit hyperinflation.
- Africa has a high percentage of people without a bank, widespread use of smartphones, and an increasingly young and migratory population.
In 2020, monthly cryptocurrency remittances of less than $10,000 to and from Africa – often exchanged head-to-head with 816 million mobile phones in sub-Saharan Africa alone – rose 55%, peaking at $316 million in June. They traded at large margins, up to 70%, due to the small number of cryptocurrency traders. Most of these commercial activities were carried out by individuals and small businesses based in Nigeria, South Africa and Kenya.
China is the largest trading partner for many African countries. Since the mid-2000s, it has been investing ($45 billion by 2019, according to the United Nations Conference on Trade and Development) in technology, communications and financial infrastructure in Africa, and in technology training en bloc. The UN Conference on Trade and Development is investing (it says $45 billion by 2019) in Africa’s technology, communications and financial infrastructure, as well as blockchain training. Egypt, Kenya, Rwanda and Eswatini are already investigating central bank digital currencies (CBDCs). As a BRICS country, South Africa is piloting a digital currency as part of Russia’s multinational digital currency initiative, which will be linked to China’s mobile electronic payment system Digital Currency, supported by a blockchain-based service network.
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Nigeria is the second largest BTC market in the world
In its 2019 Nigeria Digital Economy Diagnostic Report, the World Bank highlights the potential of the country’s digital economy. Barely a year later, in the midst of the COWID-19 pandemic, Nigeria caught up with China to become the world’s second-largest trader of Bitcoin (BTC), despite having no regulatory framework to support digital asset-related businesses.
Bitcoin trading is a source of income for a growing number of unemployed young people, in addition to the ability to send and receive cross-border payments. For example, BTC funded the #EndSARS protests against police brutality in 2020, led by youths across the country, which spread beyond Nigeria’s borders, in addition to solidarity actions in different parts of the world.
The Central Bank of Nigeria recently banned banks from operating cryptocurrency exchanges and is encouraging citizens to sign up before the 8th. Can authorize international money transfer offices for cross-border payments. As a result, the Nigerian Securities Regulatory Authority has suspended its proposed regulatory framework for digital assets. The ban is expected to remain in place until a concrete and well-designed regulatory framework is developed for the $1.8 trillion crypto-currency market. This framework could include key policy proposals by the Nigerian Technology Industry Group to introduce know-your-customer, anti-money laundering and anti-terrorism financing rules. As Abdulrashid Bawa, chairman of the Economic and Financial Crimes Commission, explains:
We will digitise our processes and establish a new, fully-fledged intelligence function that will enable us to gather intelligence to actively combat economic and financial crime. In doing so, we will also provide the Government with the high quality advice it needs, which will lead to effective governance.
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Solar energy potential in Africa
Africa is rich in energy resources, particularly solar energy, as it receives more hours of intense sunlight throughout the year than any other continent. But it lacks reliable access to the modern energy needed for digitalization.
The continent is determined to go green and switch to solar energy because it is the hardest hit by the effects of climate change, even though it contributes the least to CO2 emissions. With the exception of Eritrea and Libya, African countries have ratified the Paris Agreement with ambitious nationally determined contributions.
The International Renewable Energy Agency predicts that with the right policies, regulations and governance, and with access to capital markets, sub-Saharan Africa could meet up to 67% of its energy needs [from renewables] by 2030. And, as Songwe noted, it can provide access to energy to more than 70 percent of Africans who are currently deprived of energy.
Egypt is at the forefront of regional efforts to switch to green/solar energy. The continent is experiencing a sharp increase in new solar installations, mainly in nine countries. In a first of its kind project, Egypt recently set up a joint venture with a Chinese company to produce sand-based photovoltaic modules on site. According to research by the International Green Finance Institute, China has increased its overseas green investments under the Belt and Road Initiative to 57%.
National blockades and international travel bans resulting from the COWID-19 pandemic have accelerated the process of green digitalization in African markets. Nigerian singer-songwriter Burna Boy with his music and Ghanaian artist Amoako Boafo with his paintings have thrilled the world in 2020.
Accordingly, the UN has dedicated the entire year 2021 to the creative industries as they play a key role in promoting sustainable development for a green recovery from the COWID-19 pandemic. Building a sustainable green recovery plan will require understanding the links between climate change, health and inequality, and implementing ambitious climate action in line with the Paris Agreement. These goals are more important than ever, as they are an essential foundation for the restoration of green COWID-19. These themes were reflected in the 12 art exhibitions presented at the 7th session of the African Regional Forum for Sustainable Development conference.
The views, thoughts and opinions expressed herein are those of the author and do not necessarily reflect or represent those of Cointelegraph.
Quotes in this article from previously published sources have been slightly modified.
Selva Ozelli, Esq, CPA, is an international tax lawyer and chartered accountant who writes regularly on tax, legal and accounting issues for Tax Notes, Bloomberg BNA, other publications and the OECD.
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