Poor internet access in Africa could slow cryptocurrency growth

Poor internet access in Africa could slow cryptocurrency growth

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Answer Poor internet access in Africa could slow cryptocurrency growth

Africa is often lauded as the great environment that will embrace the development of cryptocurrencies. But could poor internet access and low quality communications slow this progress? Well, a new report from the International Telecommunication Union shows that it would cost $450 billion to connect 1.5 billion people – mostly in Africa – to the Internet.

It is new to mention that African governments spend nearly three times the global average in order to obtain high-quality Internet for all their geographical parts, in addition to the problem of low levels of education, and the high cost of devices that support the Internet in light of the low cash incomes of individuals. All these factors can slow down the cryptocurrency revolution in Africa, which is a revolution that depends mainly on a reliable, secure and stable connection to the Internet.

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Can cryptocurrency thrive with erratic internet in Africa?

The question of whether cryptocurrency in Africa can grow as expected can now be debated by replacing whether an entire continent of up to 1.2 billion people is able to have the necessary infrastructure – and technical know-how – and allowing digital money (cryptocurrencies) to thrive without Barriers.

Over the past few years, the digital currency ecosystem has grown rapidly in several African countries such as “Kenya, Ghana, Uganda, Nigeria, South Africa and Zimbabwe” with Bitcoin gaining in popularity. The wave of cryptocurrency adoption is widely seen as a key to driving economic growth and financial inclusion on the continent.

However, a new report by the International Telecommunication Union, The State of Broadband 2018: Broadband to Catalyze Sustainable Development, shows that African governments have much more to do to ensure that the continent will benefit from the Fourth Industrial Revolution.

The latest ITU data reveals that about 52%, or 3.7 billion people, of the world’s population are still offline, the majority of whom reside in Africa. The amount of infrastructure that needs to be built or upgraded to bridge the digital divide and deploy emerging technologies is huge – and the consortium estimates that the amount needed to bring this potential to 1.5 billion people would cost $450 billion.

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The International Telecommunication Union says: “National governments can make a real difference in bridging the broadband gap by leveraging technologies such as: satellite to provide reliable connectivity to unconnected regions and create an effective solution to expand the ranges of Internet access.”

From bottleneck to economic growth

According to global internet statistics, the internet penetration rate in Africa reached 27.7% by the end of March 2017, which is a negative comparison with the global average of 49.6%. Basic services in different countries across Africa. The report indicated that only 6% of Africans have access to the Internet.

These numbers make reading and hopes reassuring regarding the development of digital currency in the African continent. Virtual money thrives with internet access and reliable and stable connections that digital currencies have to reach non-dealing banks in rural areas where most Africans reside but internet connectivity is the poorest in these areas.

Internet services in Africa have been hampered by poor fixed-line infrastructure and the relative scarcity of it. Currently, more than 90% of all Internet connections are via mobile networks. Figures in the ITU report prove this point, showing that fixed internet penetration reached 0.7% in Africa in 2016, compared to 29.3% of mobile internet penetration.

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Rwanda supports broadband technology

But while African governments spend about 1.1% of their GDP on broadband technology – three times less than the global average – one country stands out.

Rwanda has achieved 90% of the telecom broadband penetration rate. In 2008, the Rwandan government embarked on nationwide deployment of optical fibers as a basic broadband infrastructure. These optical fibers have connected different parts of the country and provided high capacity cross-border links with forward connection to submarine cables.

Currently, the Rwandan government’s vision, policy, and plans recognize broadband and ICT in general, as a driver of economic growth, access to information and social cohesion, productivity and innovation across all sectors of the economy—although they do not specifically mention a synonym.

Steps have been taken to encourage innovation and entrepreneurship, reduce the cost of user devices, support the development and assimilation of relevant content and diffusion of technologies in various sectors of the economy.

It remains a mystery that with all the progress made in connecting the internet, cryptocurrencies are only starting to take off in Rwanda. Perhaps, this relates to the average cost of broadband in Africa of $493 per month according to the International Monetary Fund, which is beyond the reach of many who earn a fraction of that amount each month. Undoubtedly, poor internet access and communication problems may be the main obstacle to the adoption and growth of cryptocurrencies in Africa.

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