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Bitcoin Economy Boosting Entrepreneurship in Africa

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Artur Schabak and Ray Youssef – Co Founders of Paxful (Photo: Paxful)

Many young Africans see bitcoin as an opportunity to develop commercial ventures

CAPE TOWN, South Africa, October 3, 2019 – Blockchain technology and the role of entrepreneurship in driving Africa’s prosperity in the Fourth Industrial Revolution (4IR), were some of the key topics taking centre stage at this year’s World Economic Forum (WEF) on Africa which was held in Cape Town recently. Paxful, a leading peer-to-peer global bitcoin marketplace, is excited about the improving economic outlook for Africa and entrepreneurial growth opportunities.

With nearly 3 million users globally and Africa being its fastest-growing customer base, Paxful has a unique insight into the development of the crypto economy across the continent. The company is seeing an increase in the amount of entrepreneurial activity on its platform. Many young Africans see bitcoin as an opportunity to develop commercial ventures; users set up side-hustles and their own full-time businesses including remittance businesses. Paxful has found that users from Nigeria, Ghana and South Africa have been the most active to date this year with many operating drop-shipping businesses, payment services, as well as import-export ventures amongst others.

Crypto Economy Holds Promise for Intra-Africa Trade

Intra-regional trade is one of the highest priorities for African governments, as evidenced by initiatives such as the historic African Continental Free Trade Area (AfCFTA) agreement. By some estimates, the AfCFTA could boost Africa trade by more than 33% and generate billions of dollars of GDP gains for the continent over the long term. Various studies have shown that the digital economy presents an opportunity for Africa to deepen trade relations and boost the continent’s GDP.

Already Paxful is seeing that many African users prefer to trade with each other – territories like Nigeria, Kenya, Ghana, and South Africa lead intra-Africa trade activity on the Paxful platform.

Also Read Cynthia M. Wright: On Becoming A Successful Speaker, Business Mentor And Organisational Strategist

Examples of a New Generation of Bitcoin-Fluent Entrepreneurs in Africa

Over the years, Paxful has engaged many business owners who see a future for themselves in the crypto space. Beyond the big players, there are many ambitious up and coming bitcoin savvy business owners who focus on the African market. An entrepreneur-born in Malawi, named Grey, helps consumers buy and sell bitcoin. He has managed to expand his business to employ staff that help consumers in Malawi to navigate the crypto space to better meet their financial needs. He also mentioned that many of his customers have limited access to credit cards, opting instead to buy bitcoin in order to purchase products and services on various e-commerce and streaming websites. Some of his customers will resell the products they buy for a profit. Others will keep the products for personal use or send them to loved ones.

Some of Grey’s customers even use bitcoin to purchase cars from vendors in Japan for resell in various African countries. Interestingly most of his customers find him on social media and through messaging apps.

Social development organizations that operate in Africa like Zam Zam Water and Grow Educare Centres have also expanded their sights to include cryptocurrency in raising funds for their projects. Zam Zam Water has built schools and pays teacher salaries for communities in need in Rwanda with money raised in the bitcoin industry. Bitcoin funds raised by Grow Educare Centres has bought supplies – including books, stationery, and toys – for low-fee kindergartens that support disadvantaged communities.

“While African entrepreneurs continue to face many lingering challenges, we have seen first-hand on our platform how the opportunity to use technology and innovate can achieve greater financial inclusion as well as socio-economic development and job creation,” Ray Youseff, CEO and co-founder of Paxful.

“As an African-born tech entrepreneur myself, my hope is that African governments, regulators and policymakers will create the right operating environment for the continent’s young Digi-entrepreneurs to succeed,” he added.

Paxful

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ITFC and OCP Africa unite for the strategic financing, innovation, and capacity building of agriculture in Africa

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ITFC CEO Eng Hani Salem Sonbol and CEO OCP Africa Mr Karim Lotfi Senhadj(Image: ITFC)

ITFC and OCP Africa will jointly introduce a new “OCP School lab” campaign in Senegal in November 2019

RABAT, Morocco, October 21, 2019- The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank (IsDB) Group, and OCP Africa, a subsidiary of OCP SA, have signed a Memorandum of Understanding (MoU) that will cater towards strategic funding, innovation and capacity building measures to increase agricultural production yields and income levels for Africa’s smallholder farmers. The agreement was signed between Mr Karim Lotfi Senhadji, CEO, OCP Africa and ITFC CEO, Eng. Hani Salem Sonbol.

The MoU will increase collaboration between ITFC and OCP Africa in various areas, including  smallholder farmer training on sound agricultural practices; soil testing and fertility management to support better yields; innovation and digitalization tools to modernize agricultural practices; and capacity building and support of young farmers for sustainable and inclusive development.

Commenting on the MoU, Eng. Hani Salem Sonbol, CEO, ITFC, said that the cooperation with OCP Africa is in line with ITFC’s mandate to support the development of strategic value chains in countries member of the Organization of Islamic Cooperation (OIC). “The services provided by ITFC in the agricultural sector, both in terms of trade financing and tactial support, has expanded significantly over the past years, targeting critical areas of the value chain, from farm input to processing, pre-export, and export. The sector is also one of the value chains that is ready for innovation and SME development.”

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OCP Africa’s CEO, Karim Lotfi Senhadji said, “The smallholder farmer is central to OCP Africa’s strategy to support the transition of farming communities from subsistence farming to modern, sustainable agri-business. Our aim is to strengthen the continent’s agriculture ecosystems thus enabling African farmers to prosper. The agreement with ITFC will support efforts to train farmers on best farming practices, test soils for accurate fertilizer recommendations, facilitate access to financing, and improve access to markets”.

ITFC and OCP Africa will jointly introduce a new “OCP School lab” campaign in Senegal in November 2019. A flagship program of OCP Africa, OCP School Lab is an innovative program aimed at increasing the yields and the incomes of smallholder’s farmers on strategic crops by offering a full set of agri-services:

  • A School: interactive training sessions with live demos on good agricultural practices and animated videos in local dialects for higher impact
  • A mobile Lab: Soil-testing using latest innovations (X-rays, big data and machine learning) and live information on soil needs and fertilizer recommendations

ITFC has been providing significant support to ensure food security in Sub-Saharan Africa. In 2018, trade finance approvals for the food & agriculture sector amounted to US$749.6 million, representing 14.4% of the total trade finance portfolio, a 71% increase compared to the previous year. Sub-Saharan Africa accounts for 50% of ITFC’s food & agriculture sector financing extended in 2018.

International Islamic Trade Finance Corporation (ITFC).

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Egypt urges World Bank, IMF to support regional integrity in Africa

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CAIRO – 18 October 2019: Minister of Investment and International Cooperation Sahar Nasr called on the World Bank and IMF to boost their support to Egypt in achieving regional integrity and intra-trade in Africa, a press release on Friday read.

Addressing the Intergovernmental Group of 24 on International Monetary Affairs and Development in Washington, Nasr called on the WB and International Monetary Fund to expand investments in the region.

The minister said that Egypt’s vision to face the slowdown in global economic growth and trade tensions is to achieve more economic integration and continue to take the path of reform to make our economies more competitive and attractive for investment, to achieve the aspirations of the world countries in growth and development.

Nasr explained that the Egyptian government has implemented a comprehensive economic and social reform program to promote sustainable growth, alleviate poverty, create good jobs, enable the private sector to promote growth, and provide opportunities for all sectors of society to participate in the economy, especially women and young entrepreneurs.

The Minister added that President Abdel Fattah al-Sisi, as the chairman of the African Union, has set the achievement of regional economic integration as a top priority.

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Nasr also discussed Wednesday with the World Bank the provision of $500 million for the pollution control and solid waste management project in Egypt.

Nasr added in a statement that Egypt is also discussing with the World Bank raising the level of partnership to support the health and education sectors in Egypt.

For his part, World Bank Vice President for the Middle East and North Africa Farid Belhadj affirmed that Egypt is a very important country for the bank’s fields of work.

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“Therefore the World Bank is keen to contribute effectively to the efforts exerted to achieve development in Egypt, especially in the field of infrastructure, in light of the economic and legislative reform that contributed to improving the investment climate in Egypt,”Belhadj explained.

Egypt Today

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African Development Bank inks €12.5 million deal with Adiwale Fund for SMEs

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The African Development Bank on Thursday signed off on its €12.5 million equity investment in Adiwale Fund 1, a first-generation private equity fund targeting high growth potential Small and Medium Sized Enterprises (SMEs) in francophone West Africa.

The Bank Group’s board of directors approved the investment in March as part of its commitment to grow  SMEs and improve livelihoods in countries underserved by the global equity market.

With a target fund size of €75 million, the Fund will take minority stakes in vibrant SMEs in countries where economic prospects and the Fund’s networks permit a rapid scale up.

Deal size for the Fund will range from €3 to €8 million. Primary target countries will include Cote d’Ivoire, Senegal, Burkina Faso and Mali, while secondary beneficiaries will include Togo, Benin and Guinea.

Across these economies, some of which are fragile states, the Fund will target three sectors: consumer goods and services, including education and health; business services such as transport, logistics, information technology and construction, and manufacturing, including pharmaceuticals, agri-processing and chemicals.

Abdu Mukhtar, Director for Industrial and Trade Development said the Fund’s investment strategy is aligned with the Bank’s High 5 goals especially ‘Industrialize Africa, Integrate Africa and Improving the Quality of Life for the People of Africa’.

“The most exciting part is that the Fund focuses on SMEs in francophone West Africa which accounts for nearly 19% of West Africa’s GDP but attracts only 7% of private equity capital. As these companies grow, they cross the borders and integrate across different countries,” Mukhtar remarked as he signed and exchanged deal documents with the Fund Manager’s co-founder Jean-Marc Savi de Tové.

Established in 2016, the Fund Manager, Adiwale Partners, houses a team of experienced West African nationals with several decades of combined private equity, operational, development finance and asset management experience in Africa, Europe and the United States.

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From a development perspective, the Bank’s equity investment will provide growth capital to African SMEs, resulting in spill-over effects on job creation and tax revenues, with about 45% of the jobs going to women, Mukhtar said.

Savi de Tové said the Fund will also provide local entrepreneurs with management expertise and boost best-in class corporate governance and human capital development, which ultimately unlocks growth and supports economic transformation.

African Development Bank

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