Bitcoin’s ‘quiet boom’ in Africa

Bitcoin’s ‘quiet boom’ in Africa
A bitcoin user checks receipts after buying the cryptocurrency in Lagos. A weaker Nigerian naira is pushing US dollars out of reach for many. (Reuters)
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Updated 09 September 2020

Bitcoin’s ‘quiet boom’ in Africa

Bitcoin’s ‘quiet boom’ in Africa
  • Migrant worker remittances and young, tech-savvy users help drive cryptocurrency’s rising fortunes on the continent

LAGOS: Four months ago, Abolaji Odunjo made a fundamental change to his business selling mobile phones in a bustling street market in Lagos: He started paying his suppliers in bitcoin.

Odunjo sources handsets and accessories from China and the UAE. His Chinese suppliers asked to be paid in the cryptocurrency, he said, for speed and convenience.

The shift has boosted his profits, as he no longer has to buy dollars using the Nigerian naira or shell out fees to money-transfer firms. It is also one example of how, in Africa, bitcoin — the original and biggest cryptocurrency — is finding the practical use that it has largely failed to elsewhere.

“Bitcoin helped to protect my business against the currency devaluation, and enabled me to grow at the same time,” Odunjo said. “You don’t have to pay charges, you don’t have to buy dollars.” 

Odunjo is one of many people at the heart of a quiet bitcoin boom in Africa, driven by payments from small businesses as well as remittances sent home from migrant workers, according to data shared exclusively with Reuters and interviews with around 20 bitcoin users and five cryptocurrency exchanges.

Monthly cryptocurrency transfers to and from Africa of under $10,000 — typically made by individuals and small businesses — jumped more than 55 percent in a year to reach $316 million in June, the data from US blockchain research firm Chainalysis shows.

The number of monthly transfers also rose by almost half, surpassing 600,700, according to Chainalysis, which says the research is the most comprehensive effort yet to map out global crypto use. Much of the activity took place in Nigeria, the continent’s biggest economy, along with South Africa and Kenya.

This represents a reversal for bitcoin which, despite its birth as a payments tool over a decade ago, has mainly been used for speculation by financial traders rather than for commerce.

Why a boom in Africa? Young, tech-savvy populations that have adapted quickly to bitcoin; weaker local currencies that make it harder to get dollars, the de facto currency of global trade; and complex bureaucracy that complicates money transfers.

The bitcoin users interviewed by Reuters, based in five countries from Nigeria to Botswana, said the cryptocurrency was helping people make their businesses nimbler and more profitable, and helping those working in places like Europe and North America hang on to more of the earnings they send home.

Yet risks abound.

Bitcoin and other cryptocurrencies are unregulated in many countries meaning there is no safety net. For many, converting local currencies to and from bitcoin relies on informal brokers. Prices are volatile, and buying and selling is a complex process. In 2018, the Nigerian central bank warned cryptocurrencies were not legal tender.

A steady stream of customers comes and goes from Odunjo’s shop in a market known as Computer Village. Odunjo makes two or three transfers a month of around 0.5-0.7 bitcoin ($5,900-$8,300) each, to suppliers in Shanghai and Zhangzhou. East Asia, Chainalysis found, is one of the top partners for bitcoin trading with Africa.

Odunjo’s trades offer a microcosm of the wider trends at play in Nigeria and across the continent.

In Nigeria, small cryptocurrency transfers totalled nearly $56 million in June, nearly 50 percent more than a year before. The number of transactions jumped over 55 percent to 120,000.

Gauging how cryptocurrencies are used in particular locations is tough, though. Digital coins offer a high degree of anonymity, and though the value of transactions can be tracked on the blockchain, the identity or location of a user cannot.

Chainalysis, which tracks crypto flows for financial firms and US law enforcement, gathered the data studying web traffic and trading patterns, separating transfers of under $10,000 from larger sums common among professional traders. With Nigeria’s oil-dependent economy rocked by low crude prices, the central bank has twice devalued the naira this year. 

The naira’s fall has pushed many Nigerians toward bitcoin as they seek methods of buying goods from overseas without having to buy dollars.

Sylvester Kalu, who runs a clothing operating in Uyo, eastern Nigeria, uses bitcoin to buy supplies from Istanbul and Shenzhen. “Everything is oil. When the price of oil dropped, forex became scarce,” he said. 

The 30-year-old said his transactions totalled around 2 bitcoin ($20,000) a time, adding: “I don’t need anyone in the banks, I don’t need a person to use the back door to get dollars.”

Timi Ajiboye, who runs Lagos exchange BuyCoins, said its monthly cryptocurrency volumes jumped over three-fold to $21 million in June after the naira was devalued in March.

Exchanges across Africa spoke of a similar boom. Yellow Card, which operates in five countries, said its monthly crypto volumes had jumped five-fold in 2020 to $25 million in August. A big driver was workers using bitcoin for remittances, it added.

The combined monthly bitcoin trading volumes of all market participants in South Africa and Nigeria jumped by half this year to more than $536 million in August.

For some people working abroad, sending money home via bitcoin can be quicker and cheaper.

A Nigerian worker in London sending £100 ($132) in cash to Lagos via a big traditional money-transfer firm, for example, would pay fees of around 5 percent.

Bitcoin fees vary depending on the exchange or broker, but would typically total about 2-2.5 percent for sending the same amount.

However both exchanges and over-the-counter (OTC) brokers carry risks, from hacks to scams.

And bitcoin, while handy for transfers, isn’t much use on the ground — shops and landlords rarely accept it, for instance. This means friends or family sent funds by workers must convert it back to traditional currency, often via a broker at their end, introducing additional risk.

But for a growing number of people, the potential rewards outweigh the pitfalls.

“People are very adoptive of any technology that will make their life easier,” said Frankline Kihiu, a crypto broker in Kenya’s capital, Nairobi.

“In most African countries, there are lots of government restrictions that bitcoin takes away.”


Europe slaps anti-dumping duties on MEG Saudi petchems product

Europe slaps anti-dumping duties on MEG Saudi petchems product
Updated 7 min 15 sec ago

Europe slaps anti-dumping duties on MEG Saudi petchems product

Europe slaps anti-dumping duties on MEG Saudi petchems product
  • The anti-dumping duties on MEG imports from Saudi Arabia are estimated at 11.1 percent

DUBAI: The European Commission (EC) announced proposed anti-dumping duties on monoethylene glycol (MEG) imports from Saudi Arabia and the US, Argaam reported.
The anti-dumping duties on MEG imports from Saudi Arabia are estimated at 11.1 percent, the financial news site reported, citing a document.
The companies affected by the new levy include Yanbu National Petrochemical Co. (Yansab), Saudi Kayan Petrochemical Co. (Saudi Kayan), Eastern Petrochemical Co. (Sharq), Saudi Yanbu Petrochemical Co. (Yanpet), Arabian Petrochemical Co. (Petrokemya), and Jubail United Petrochemical Co. (JUPC).
The original anti-dumping probe into Saudi and US MEG exports began in October 2020, Argaam said. It followed a petition from European ethylene glycol producers, which represent a quarter of total producers.
In December 2019, India also started an anti-dumping probe into imports of MEG from Saudi Arabia, Kuwait, Oman, the UAE, and Singapore, Argaam said.
Monoethylene glycol is used to make polyester fibers and film as well as engine coolant.


Jabal Omar losses widen on hotel closures in Makkah

Jabal Omar losses widen on hotel closures in Makkah
Updated 22 min 14 sec ago

Jabal Omar losses widen on hotel closures in Makkah

Jabal Omar losses widen on hotel closures in Makkah
  • Construction work extends across two square kilometers where some 40 towers are at various stages of development.

DUBAI: Jabal Omar Development Co. reported a widening first-quarter loss as hotels in Makkah were forced to close amid the pandemic.
The developer that is spearheading the vast redevelopment of land around the Grand Mosque in the holy city, said losses widened by 45 percent to SR345.3 million ($92 million). Sales fell 89 percent to SR21.6 million, it said in a stock exchange filing on Tuesday.
It blamed the performance on the “significant decline in revenues due to the decrease in the occupancy rate of hotels and commercial malls.”
At the same time its financial charges rose due to the non-capitalization of borrowing costs, it said in the filing.
Saudi Arabia is investing billions of dollars to develop hotels, malls and other real estate in Makkah to accommodate the expected surge in pilgrims.
Current construction work extends across two square kilometers where some 40 towers are at various stages of development.
They are expected to accommodate some 4,000 guests on any normal day, and up to 100,000 visitors on any given day during the Hajj and Umrah seasons.


Arab News publisher SRMG rebrands to Saudi Research and Media Group

Arab News publisher SRMG rebrands to Saudi Research and Media Group
Updated 26 min 55 sec ago

Arab News publisher SRMG rebrands to Saudi Research and Media Group

Arab News publisher SRMG rebrands to Saudi Research and Media Group
  • The group owns several companies in publishing and media, including Saudi Research and Publishing Company and Asharq News Services

DUBAI: The Saudi Research and Marketing Group, the company which publishes Arab News, has rebranded to Saudi Research and Media Group.
The Tadawul-listed company completed the change on Monday, according to a bourse filing, but the move was first approved in April.
The group owns several companies in publishing and media, including Saudi Research and Publishing Company and Asharq News Services.
The rollout of Saudi Vision 2030 reforms, a booming entertainment sector and the opening of the Kingdom to foreign tourists are all contributing to the Kingdom’s rapidly expanding media landscape.


No new fossil fuel projects for net-zero: IEA

No new fossil fuel projects for net-zero: IEA
Updated 30 min 55 sec ago

No new fossil fuel projects for net-zero: IEA

No new fossil fuel projects for net-zero: IEA
  • The IEA predicted a “sharp decline in fossil fuel demand” in the next three decades as well as a 2040 deadline for the global energy sector to achieve carbon neutrality

PARIS: All future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050 and to stand any chance of limiting warming to 1.5C, the International Energy Agency said Tuesday.
In a special report designed to inform negotiators at the crucial COP26 climate summit in Glasgow in November, the IEA predicted a “sharp decline in fossil fuel demand” in the next three decades as well as a 2040 deadline for the global energy sector to achieve carbon neutrality.
It called for a rapid and vast ramping up of renewable energy investment and capacity, which bring gains in development, wealth and human health.
IEA Executive Director Fatih Birol said the roadmap outlined in the report showed that the path to global net-zero by 2050 was “narrow but still achievable.”
“The scale and speed of the efforts demanded by this critical and formidable goal — our best chance of tackling climate change and limiting global warming to 1.5C — make this perhaps the greatest challenge humankind has ever faced,” he said.
Built using its industry network and energy modelling tools, the IEA’s roadmap lays out more than 400 milestones on the path to net-zero by mid-century.
These include “no new oil and gas fields approved for development” beyond projects that are already committed as of 2021.
It predicts “a sharp decline in fossil fuel demand, meaning that the focus for oil and gas producers switches entirely to output — and emissions reductions — from the operation of existing assets.”
The roadmap also said that sales of new internal combustion engine passenger cars would have to end in 2035 and energy efficiency would need to improve four percent annually this decade — around three times faster than the current trajectory.
With annual additions of solar and wind power reaching 630 and 390 gigawatts respectively by 2030, the IEA said that investment in renewables could put global GDP four percent higher by 2050 than it would be based on current trends.
By 2050, it said that renewables capacity and greater efficiency would see global energy demand drop about eight percent compared to today, even as two billion more people gained access to electricity.
Investment totalling around $40 billion a year — around one percent of current energy sector investment — is projected to hook hundreds of millions up to the global grid.
The IEA said that clean energy and access to clean cooking solutions could cut the number of premature deaths by 2.5 million a year by 2050.
Overall, fossil fuels are set to account for only around a fifth of energy supply by 2050, down from almost four fifths currently, the report showed.
Dave Jones, global lead at the energy think tank Ember, said Tuesday’s assessment was “a complete turnaround of the fossil-led IEA from five years ago.”
“This is truly a knife into the fossil fuel industry,” he said.


Under a scenario where all current national net-zero pledges are met on time and in full, the IEA outlined a changing energy mix in the coming decades.
Oil demand is predicted to plateau at around 104 million barrels a day just after 2030, the report showed.
Gas use is likely to increase significantly in the stated pledges pathway, as is nuclear.
It also said that all inefficient coal power plants needed to close by 2030 in order to achieve net-zero by 2050.
“This will be a huge step-up in ambition for so many countries, especially China,” said Jones.
“India and South Africa will need international assistance to meet this goal.”


While most of the global CO2 reductions until 2030 in the net-zero pathway come from “technologies available today,” the IEA said that around half of reductions by 2050 would be provided by “technologies that are currently only in demonstration or prototype phase.”
These include direct air capture and storage of CO2 from the atmosphere, which it said could be “particularly impactful.”
Teresa Anderson, climate policy coordinator at ActionAid International, said that the IEA’s net-zero plan still relied too heavily on as-yet untested technology to remove carbon pollution.
“Any role of future technologies should be to replace fossil fuels, not justify their use,” she told AFP.
“Given all the uncertainties and risks around long-shot technologies and land availability for bioenergy, the IEA would do better to focus on bringing emissions down to real zero, rather than using ‘net’ zero accounting to pander to the fossil fuel industry’s fears of losing profits.”


Stocks fall as tech shares weigh, gold climbs

Stocks fall as tech shares weigh, gold climbs
Updated 18 May 2021

Stocks fall as tech shares weigh, gold climbs

Stocks fall as tech shares weigh, gold climbs
  • Amid a flight to safety, the precious metal is seen as a hedge against rising inflation

NEW YORK: Stock indexes were lower globally on Monday with technology shares on Wall Street falling, while US Treasury yields traded little changed even after a report showing the highest prices ever paid in a May manufacturing survey for New York state.

Concerns over inflationary pressure helped to lift gold prices to their highest in more than three months, however.

The Empire State Manufacturing Survey, produced by the New York Fed, showed the prices paid index rose to a record 83.5, the highest since the data series began in 2001, said Tom Simons, money market economist at Jefferies & Co.

Wall Street’s declines follow the S&P 500’s biggest one-day jump in more than a month on Friday.

While the week is expected to be relatively quiet for economic data, investors will be anxious to see minutes on Wednesday from the Federal Reserve’s policy meeting last month which could shed more light on the policymakers’ outlook of an economic rebound.

“The volatility has picked up because a lot of the good news has been priced in, and last week we finally saw fears of inflation,” said Greg Marcus, managing director, UBS Private Wealth Management.

The spread of the coronavirus was also a drag in some markets, with Singapore reporting the highest number of local infections in months and Taiwan seeing a spike in cases.

The Dow Jones Industrial Average fell 120.02 points, or 0.35 percent, to 34,262.11, the S&P 500 lost 20.43 points, or 0.49 percent, to 4,153.42 and the Nasdaq Composite dropped 121.39 points, or 0.9 percent, to 13,308.58.

The pan-European STOXX 600 index lost 0.05 percent and MSCI’s gauge of stocks across the globe shed 0.26 percent.

In the Treasury market, the yield on benchmark 10-year US Treasury notes was up 1 basis point at 1.645 percent, below a spike to 1.77 percent in late March.

The dollar was steady near recent lows as new restrictions in Asia to contain COVID-19 supported safe-haven currencies, while bitcoin extended its slide.

The dollar index fell 0.116 percent, with the euro up 0.12 percent at $1.2154.

Bitcoin dropped to a three-month low after Tesla Inc. boss Elon Musk suggested over the weekend that the electric automaker may have already sold some of its holdings in the digital currency.

Oil prices edged higher. Brent crude rose 56 cents, or 0.8 percent, to $69.27 a barrel, and West Texas Intermediate (WTI) crude was up 63 cents, or 1 percent, at $66.

In China, meanwhile, retail sales rose 17.7 percent in April from a year earlier, although they fell short of forecasts for a jump of 24.9 percent, while industrial output matched expectations with a rise of 9.8 percent.

Gold prices climbed to their highest in more than three months on Monday. Spot gold jumped 1.3 percent to $1,866.45 per ounce, after hitting its highest since Feb. 1 at $1,867.15. US gold futures gained 1.5 percent to $1,866.40.

“There’s a flight to safety out of the equity markets ... and anticipation that we’re going to continue to see inflation numbers trend much stronger going forward,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.

“The Fed is going to continue to hold on to the notion that the increase in inflation has to do more with the reopening of the economies than to do with any real inflation,” Sica said.

Gold is seen as a hedge against rising inflation. On a technical note, the gold market has breached the 200-day moving average and that’s supporting prices further, said Eli Tesfaye, senior market strategist at RJO Futures.

Elsewhere, platinum rose 0.7 percent to $1,234 per ounce.