Bitcoin adoption is making significant advancing in Africa, especially Nigeria despite its economy can shrink 8.9%
According to a report from Finance Minister Zainab Ahmed, the downturn of the Nigerian economy originated from the collapse of oil price that was affected by COVID-19. In particular, the consequence is that the Nigerian economy may shrink to 8.9% by 2020. So, will Bitcoin help make Nigeria revive the economy?
Nigeria’s economy to shrink 8.9% in the worst case
Nigeria’s first-quarter revenue from crude sales was 940.9 billion naira ($ 2.6 bln), missing its target by 31% due to the oil price crash. Also, Nigeria has $ 72.04 million in its oil savings account as of May 21, compared to $ 325 million in November.
Share with the National Economic Council, Ahmed said:
“The contraction could reach 4.4% in a best-case scenario, without any fiscal measures. But with the stimulus, the contraction could be kept to just 0.59%.”
Pandemics and falling oil prices not only affect growth but also reduce the state’s main source of income. That creates great financial needs.
She added:
“We will go into recession – but what we are trying to do is to make sure that it is shallow so that we will quickly come out of it, come 2021. 40% of Nigerians were poor and the crisis would increase poverty.”
In Nigeria, there have been more than 6,000 confirmed cases of Coronavirus infection. This number could even rise to nearly 300,000 by the end of August 2020. To date, 200 people have been confirmed to have died from the COVID-19 virus.
The World Bank is planning an immediate bailout package for Nigeria. In particular, the proposal was worth $ 1.5 billion and intended for Nigeria’s states to provide relief at the sub-national level. It could be disbursed by September.
Will Bitcoin help make Nigeria revive the economy?
Africa also has some of the world’s most inflationary economies where fiscal indiscipline and controversial monetary policies sometimes erode citizens’ savings overnight. Apart from governments’ heavy hand, external factors such as sanctions and conflict also threaten savings, making cryptocurrency a less exposed investment.
According to Arcade Research, Africans rank atop global cryptocurrency ownership rates. As AZcoin News reported, it is known that South Africa is ranked third worldwide, with 13% of Internet users own or use cryptocurrencies. Nigeria occupies the fifth place, with 11% of Internet users having cryptocurrency. The worldwide average stands at 7%.
Source: Arcane Research
In particular, Nigeria tops the list of Google searches for Bitcoin worldwide. In particular, South Africa, Ghana, and Kenya ranked fourth, fifth and 17th respectively.
Arcane Research report stated:
“There’s little to no clarification from governments regarding cryptocurrency regulation in African countries. Almost 60% of African governments are yet to written their stance on cryptocurrencies, which is causing a drag on the adoption of digital currencies.”
The fact that African citizens are relying on crypto assets despite the lack of proper infrastructure and regulatory clarity is a testament to the spacious room to accept cryptocurrencies across the continent.
Many major players in the cryptocurrency industry have entered the African market. Even, as AZCoin News reported, during an AMA on Zoom with critical members of the African cryptocurrency community with the participation of the Cointelegraph, Binance CEO Changpeng Zhao (CZ) expressed an extremely open attitude towards this African continent.
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