Charles Hoskinson is the founder of Cardano, and is CEO of the companies developing that blockchain, first Input Output Hong Kong (IOHK) and then Input Output Global (IOG). He always expressed great interest in the African continent, to introduce his technology seeking to improve the lives of the inhabitants of those lands.
IOG is actively involved in various initiatives to promote blockchain industry technology and innovation in Africa.
In an article published in October 2021, on the official IOG Blog, titled Africa is where the tough get going, we can understand the company’s focus on Africa. It discusses the challenges and opportunities of blockchain technology in Africa. It highlights how Africa’s unique economic and technological landscape presents both obstacles and potential for the adoption of blockchain solutions.
The article notes that Africa has a large unbanked population, unstable currencies, and limited access to traditional financial services, creating a need for innovative financial technologies like blockchain. However, the article also recognizes the infrastructure challenges, regulatory uncertainty and digital literacy barriers that must be overcome for blockchain adoption in Africa.
Overall, the article argues that Africa’s resilience and entrepreneurial spirit make it a promising region for blockchain to thrive, despite significant obstacles.
To understand the business that IOG proposes, we must first understand the context.
Africa Statistical Data
I will only mention some data that I consider relevant to understanding the situation on the continent.
It is estimated that the total population of Africa currently exceeds 1.4 billion inhabitants according to the site Worldometer, which represents almost 18% of the world’s population. Africa’s population has grown rapidly over the last century and is expected to continue to do so at a high rate, African Century.
The UN forecasts that the African population will approach 2.5 billion by 2050, which would represent more than 25% of the world’s population.
When it comes to digitalization, the use of the internet is key for the blockchain industry. Let’s see.
Nigeria and Egypt are among the countries with the largest population of internet users: Countries with the largest digital populations in the world as of January 2023.
As of January 2024, Nigeria had over 103 million internet users, the highest number recorded in all of Africa. Meanwhile, Egypt took second place with more than 82 million users. The majority of web traffic in Africa’s major digital markets came from mobile devices: in Nigeria, one of the countries with the largest number of Internet users worldwide, 86.2% of web traffic was generated through smartphones and approximately 13.3% through PC devices. Number of internet users in Africa as of January 2024, by country.
The rest of the African countries do not have a market that could arouse particular interest. However, the projected trend for (all of) Africa indicates a constant increase in Internet users, since 2014, and it is estimated that the number of users will reach 1.1 billion users by 2029.
But we must understand this technological data with the social and economic issue, Africa is the continent with the greatest poverty in the world.
The results of my research indicate that many of The poorest countries in the world are in Africa, and therefore Africa is clearly the poorest continent overall. Specifically:
- Burundi is the poorest country in the world, with a Gross National Income of only $840 per capita. Other African countries, such as the Central African Republic, the Democratic Republic of the Congo, Somalia and Mozambique, among others, are also among the poorest in the world.
- In the search results Africa’s economic malaise is claimed to be self-perpetuating as it breeds more disease, war, misrule and corruption. Poverty in Africa is widespread, with 424 million people in sub-Saharan Africa living in severe poverty in 2019, and this number will rise to 460 million in 2022.
- The search results also note that African nations tend to rank near the bottom of any list that measures small economic activity, such GDP per capita, despite their wealth in natural resources.
- In a World Bank report, in 2016 there were more poor people than in 1990, two out of every five adults were still illiterate and violence was increasing, and it does not seem to have changed today. While Poverty in Africa Has Declined, Number of Poor Has Increased.
Furthermore, life expectancy is not very encouraging.
For those born in 2023, the average life expectancy at birth in Africa is 61 years for men and 65 years for women, well below the global average life expectancy of 70 years for men, and 75 years for women: Average life expectancy at birth in Africa for those born in 2023, by gender and region.
Given that IOG has entered into agreements with African governments as we will see in this article, and intends to continue doing so, the corruption of the majority of African governments is no small fact, which significantly affects the development and governance of the region.
Studies indicate that corruption in Africa is widespread in the public sector in Africa, where Sub-Saharan Africa is one of the most corrupt regions in the world. In this Transparency International article you can read more about this topic: Corruption in Africa: 75 million people pay bribes.
IOG’s Business in Africa
The company led by Charles Hoskinson understands that Africa is a virgin market, and little sought after by the blockchain industry.
The developers of the blockchains with the highest market capitalization, such as Bitcoin and Ethereum, concentrate their businesses mainly in the United States for the first, and in the United States, Europe and Japan for the second, through Consensys, the foundation that develops software for applications and services that operate on the Ethereum blockchain.
IOG’s focus in Africa can be summarized in activities that include:
- Provide digital identity solutions
- Facilitate access to technological infrastructure, with essential online services
- Improve education and training
- Implement blockchain solutions for government services
- Promote financial inclusion
Let’s look at these activities in detail.
IOG established a base of operations in Africa, more precisely in Ethiopia, with John O’Connor as Director of African Operations, but he is no longer so, since he himself publishes it on his LinkedIn account: Feb 2018 – Nov 2023, as you can see in this screenshot:
At the time of writing this article there is no similar position for Africa, as published on the official site IOHK|Leadership.
In May 2018, IOHK signed a Memorandum of Understanding (MOU) with the Ethiopian government to participate in training blockchain developers in the agricultural industry.
In that same year, IOG went to Kigali, Rwanda, where Charles participated in the “Transform Africa” Summit.
The summit sought to bring together global and regional leaders from governments, businesses and international organizations to collaborate on new ways to shape, accelerate and sustain Africa’s digital revolution: How Cardano can help development in Africa.
So far there are no known advances or developments that IOG has made in Rwanda.
Then in April 2021, IOG announced a new partnership with the Government of Ethiopia, this time to implement a national blockchain-based student and teacher identification system to digitally verify grades, remotely monitor school performance, and boost education and employment across the country.
Currently I cannot find more information on the progress of this partnership. On the official IOG blog, two years later, there is an article published in May 2023, with no further information: Atala PRISM: pioneering digital identity with decentralized solutions.
In the article Identity is the key to our vision for Africa, IOG analyzes the importance of identity decentralized blockchain for the future of Africa, and in particular economic identity for people around the world. It highlights the disparity between developed and developing countries in terms of access to identity.
With the slogan Connecting the unconnected, banking the unbanked, Hoskinson’s company faced the challenges of providing financial services to the unbanked population. It highlights that more than 1.7 billion adults around the world lack access to basic financial services, which can limit their ability to save, borrow and create wealth.
They understand that blockchain technology and decentralized finance (DeFi) could help solve this problem by providing more accessible and affordable financial services such as savings, loans and payments without the need for traditional banking infrastructure, potentially reaching the unbanked more effectively.
To do this, providing technological infrastructure is key, since, as I explained before, Africa in general does not have it. That’s why IOG partnered with World Mobile Chain (WMC), a company founded in London in 2018, as the first global telecommunications network built on blockchain technology.
WMC began the process in Zanzibar (Tanzania) with the incorporation of between 100,000 and 150,000 people into the network, with the aim that people would take charge and start making money with the network. Once the process is perfected in Zanzibar, it will be implemented in Tanzania. With a potential market of 20 million people in 13,000 villages, WMC aimed to implement the project in 600 villages per month.
In early 2022, IOG launched ARIOB, a business incubation program, in collaboration with iceaddis, a pan-African business incubator and accelerator. The funds were obtained via the Project Catalyst, at the end I leave two articles about this development (1),(2). You can read more at Project Catalyst launches incubator for Africa.
The incubator aims to help startups in Africa access business-building expertise and resources to develop innovative products and solutions.
IOHK, in collaboration with the Africa Blockchain Center (ABC), taught towards the end of 2023, a training program two-month session on the Cardano blockchain in Nairobi, Kenya, to equip students with the essential Haskell programming skills and knowledge to create Plutus and Marlowe financial smart contracts. You can read more at: A new blended learning experience for Cardano developers in Africa.
Final Words
With this information that I have presented to you in the article, I hope you have been able to understand IOG’s approach to doing business with Cardano technology on the African continent.
This way you can do your own research to update the progress of Cardano development in Africa, the promised land.
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