Statistics South Africa released information in September 2016 that food prices had risen 11.6% from from August 2015 to August 2016. The Pietermaritzburg Agency for Community Social Action (PACSA) report released this month said food basket inflation increased 15.1 percent this year (2016) compared with last year as a result of the persistent drought that the country has been facing and the weakening of the Rand.
The price of Bitcoin in Rands has risen from around R3 800 to R8 600 in the year August 2015 to August 2016 – A 55% increase. The year long bull rally for Bitcoin has been consistent across all global currencies.
South Africa is Africa’s leading market for Bitcoin. Fiatleak.com shows that the country has the 3rd most transactions after China, with the US being the first.
The most populous country in Africa is Nigeria and Bitcoin growth is probably going to exceed that of South Africa in the months to come. Nigeria is currently in a recession and has an inflation rate of nearly 18%.
Vic Chimex, Principal government radio reporter in Nigeria and a Bitcoin investor, says:
“With the current recession in the country and even almost throughout the world, one needs to look for other sources of making money.”
The only problem is that knowledge about Bitcoin is scarce. Investors are reluctant to dive in after losing a lot of wealth in online currency trading. As information and awareness spreads expect to see adoption driven by speculation and the real need to remit money throughout the continent.
The Central Bank of Nigeria changed its policy in August toward money transfer operators, effectively blocking many services used by Nigerians to send money to and from the country.
Nigeria is the biggest remittances receiver in Africa and the sixth largest receiver of remittances in the world. South Africa is the largest sender of remittance in Africa and also the most expensive of the G20 countries to send remittances from. The African Migration Project’s (AMP) survey on Africa households revealed intra-regional and domestic remittances are sent overwhelmingly through informal channels.
It has become somewhat of a cliche to talk about Africa and remittance but all cliches are grounded in truth. As awareness of Bitcoin spreads it is natural to assume that the first and most obvious use will be for remittance.