While mobile money has taken off significantly in Africa and continues to grow, a new trend – digital currency – is also gaining popularity.
South Africa, Nigeria and Kenya have been identified as the front runners in rolling out and adopting online retail sales.
There will be as many as 12 million Bitcoin wallets across the continent in less than 10 years, according to experts at Frost and Sullivan. Kenya has led with the mobile money revolution which has now spread and taken root in other African countries such as Zimbabwe and Tanzania.
The East African country is also set to be a major market for digital currency and experts have predicted that about one third of the country’s population will have a Bitcoin wallet by 2025.
Digital commerce and mobile finance advisory company, Mondato has also said that mobile money services have limitations despite the immense development and expansion of platforms by operators.
“Vertically integrated proprietary networks force providers to operate outside of their comfort zones,” Mondato said.
Frost and Sullivan says “online retail will grow significantly in the next five years and will account for nearly 7% of total retail sales in Africa in 2025. Nigeria, South Africa, Egypt, and Kenya are emerging as the top markets for online retailing” in Africa.
“Africa will have tremendous market potential for firms that are operating in the digital currency space. By the end of 2015, there will be 12 million Bitcoin wallets in Africa and nearly one-third of Kenyans will be using a Bitcoin wallet.”
Rapid urbanisation, mobility, infrastructure, natural resources, telecommunications investments and inter-regional trade will help African economies boost overall gross domestic product to as much as $4.5 trillion by 2025, said Frost and Sullivan in a new release titled, Mega Trends in Africa.
“The continent is set to become the second fastest growing region by 2025, with a gross domestic product (GDP) of $4.5 trillion. It is expected that close to half of the continent’s population will live in large cities and that 58% of its working age population (15 – 64) will exist in 2025,” says Frost and Sullivan.
The release adds that trade volume in the region will have grown significantly by 2015, with East Africa seen as having the highest growth rates. The massive growth in East Africa will largely be driven by “improved transportation infrastructure”.
The proposed Free Trade Area (T-FTA) between South African Development Community (Sadc), Common Market for Eastern and Southern Africa (Comesa) and East African Community (EAC) is also expected “to drive imports by an average of 60%” in the next four years.