On 6 March 1957, Ghana became the first sub-Saharan African country to gain its independence from European colonisation. Within 10 years of Ghana’s independence, 31 other African countries had gained their own independence. Ghana‘s leader Kwame Nkrumah, who became President in 1960, hoped to secure economic independence through a rapid industrialisation of the country using state-owned factories. Through state control of the economy, he aimed to reduce dependence on foreign capital, technology, and material goods. Within 6 years of his Presidency, the United States, through the CIA, as well as other Western powers (most notably the UK), orchestrated a violent coup d’état led by national military and police forces.
The effect of this coup? Ghana realigned itself with the West and invited the International Monetary Fund (IMF) and World Bank (WB) to help manage its economy. Since then, the Ghanaian cedi has devalued by 38,000%, Ghana receives a fraction of the natural resources that it exports, and Ghana is forced by IMF and WB policies to import finished products from rich countries, priced in the dollar. Independence from the European colonisation only led to neo-colonialism through economic control.
The post-colonial control through orchestrated coups followed by the installation of the IMF and World Bank has been enacted in several countries across Africa. The result of this to African nations has been agricultural and energy dependence, privatisation of public companies, large indebtedness paid back with more indebtedness, and support to corrupt African leaders who don’t pursue change. In effect, puppet states whose resources are extracted at the cost of their own citizens, and to the benefit of the rich Western institutions and nations.
In French-colonial Africa, the CFA franc system is the tool for economic control that is used. Under the CFA franc currency, fourteen African nations are forced to deposit half of their foreign exchange reserves with the French Treasury to secure a French guarantee that their new currency, the CFA franc, will be convertible to, and have a fixed exchange rate with the Euro. This effectively means that a Togolese citizen (for example) looking to buy a product priced in dollars, would first be forced to convert their CFA franc to the Euro, pay the associated conversion fees plus an additional 15% convertibility fee, before being able to buy the product. This can add an additional cost of up to 20% to any product bought internationally.
65 years since Ghanaian independence, not much has changed. The Ghanaian cedi is the second worst-performing African currency of 2022 with a loss of 38.86% to the US dollar, according to Bloomberg. Inflation ran to highs of 53% in 2022, and Ghana, once again, came to an agreement with the IMF, adding to the external debt of over 47 billion USD.
It is in this backdrop that the first inaugural Africa Bitcoin Conference (ABC) took place on December 5 – 7, 2022 in Accra, Ghana. Set in the grand Kempinski Hotel in the business district, the conference made history as the first Pan-African gathering of Bitcoiners and crypto-enthusiasts.
The organisation of this conference is the logical extension of a momentum that has developed within Africa. Africa has become one of the fastest-growing crypto markets globally, even if still the smallest at $20 billion per month in mid-2021, according to Chainalysis. Even though the global crypto market suffered in 2022 due to: global increases in interest rates due to high levels of inflation, imploding exchanges and funds, and criminal fraud; the African market remained largely unaffected, driven by large retail and small retail-sized payments according to Chainalysis.
Bitcoin, and other crypto are mainly used to solve local day-to-day problems associated with the lack of formal banking systems and poor financial inclusion in Africa. Several Africans receive income from family working as expats or operate internationally oriented businesses (or have international suppliers) which require the flow of money globally. These cross-border remittances are incredibly expensive for the typical African due to capital controls such as onerous compliance measures, inordinate fees, and complex cross-border regulations. For countries where the monthly wage is often less than a few hundred dollars, each extra cost can impact survival of the business or family. As a result, the ease and speed of cryptocurrencies solve a key issue of money transfer. Far from ideology or purely trading (although there is a growing community of traders), African crypto participants largely focus on practicality. Many African users also use crypto to access USD through stablecoins. These measures are a way for them to avoid the depreciation of their own national currencies due to economic mismanagement.
This theme of practicality was an undercurrent throughout the conference. With both the African participants and presenters focusing on the need for practical tools to address the circumstances of Africans. Innovations such as Machankura, a service that enables BTC transactions on mobile phones using USSD codes instead of the internet, or Trojan Mining, a BTC mining service that leverages excess hydroelectricity, stand out due to their singular focus on delivering a product or a service tailored to African needs. Several speakers and panellists focused on the need to develop solutions that are easily understandable by the people, and the conference coalesced several grassroot communities that were emerging on the continent. The spirit of Pan-Africanism was also kept alive with a stimulating keynote address by Bernard Parah, CEO of Bitnob, while key international speakers such as Jack Dorsey, CEO of Block and former CEO of Twitter and Alex Gladstein, Chief Strategy Officer at the Human Rights Foundation, added ideological focus on decentralisation and the development of an independent financial system.
Indeed, as African has seen in its own history, financial and economic freedom is paramount. The neo-colonialist structures implemented in the 50s-mid 70s created a corrupt financial environment that only looks to extract value from Africa to Western nations. Coupled with the era of modern central banking, money has long been used as a tool for suppression and control. The fight for independent money is one that Africans can sympathise with, and for Bitcoin and other cryptocurrencies to succeed, they need to be practical and useable for the lowest common denominators. Continued African adoption and innovation is critical for the global success of crypto.