A look at why the Central African Republic is embracing cryptocurrencies, Ethiopia is embracing M-Pesa, and Sasol is hoping to capitalise on the EU-Russia fallout.
Kenya’s popular M-Pesa mobile money service could soon be expanded to Ethiopia’s 110 million-strong market.
Ethiopia’s central bank has drafted a bill to allow foreign investors to offer mobile money services in the country, boosting firms such as Safaricom, which hopes to have its M-Pesa payment service operating in Ethiopia later this year.
Last year, the Kenyan telecommunication giant led a consortium that secured the first private mobile telephony license in Ethiopia, however, it does not have a permit to provide services like M-Pesa.
The National Bank of Ethiopia (NBE) hopes to remove this remaining legal hurdle through the bill, which was made public in April.
The head of payment settlement at NBE, Marta Hailemariam, told the Ethiopian press: ‘So far, there is no law that enables foreign operators like M-Pesa to acquire a license in Ethiopia. If the new amendment is approved, it will allow M-Pesa to get a license in Ethiopia.’
Ethiopia is liberalising its telecoms sector following reforms unveiled by Prime Minister Abiy Ahmed in 2018.
CENTRAL AFRICAN REPUBLIC
The Central African Republic (CAR) has legalised the use of cryptocurrencies in its financial markets.
On April 20, Justin Gourna Zacko, the CAR’s minister of digital economy, post and telecommunications, introduced the cryptocurrency bill which was approved unanimously by parliament, despite previous protests from the opposition.
'There are so many advantages in cryptocurrencies,' said Zacko, who highlighted the difficulties people currently face when they want to send or receive money internationally.
‘With cryptocurrency, there is no more control of the Central Bank,’ he added.
‘You have your money, you send it to an investor for a business, you receive it in any currency, you can dispose of it in dollar, Euro, CFA, or naira.’
The bill provoked strong reactions from the country’s opposition party, though. Three members of the commission that studied the bill cited crypto’s potential use for money laundering, tax evasion, and fraud.
Under the proposals, however, those caught using crypto for illegal means could be jailed for up to 20 years and fined up to a billion CFA francs, roughly $1.6 million.
Businesses will be allowed to make payments and pay taxes in crypto through licensed entities.
According to Zacko, the law aims to create a friendly environment for the growth of the crypto sector in the country.
The CAR’s approach to cryptocurrencies is a stark contrast to that taken by Nigeria and Kenya, both of which have chosen to ban transactions or instruct their banks to avoid them.
Despite the barriers inhibiting crypto use in much of Africa, it continues to grow in popularity.
According to a report by Technext published in March, the number of African crypto users surged by 2,500 per cent in 2021.
South Africa’s biggest fuel producer announced in April that it is to speed up its green hydrogen plans in response to the Russia-Ukraine conflict.
Sasol Ltd said it planned to accelerate its schedule for green hydrogen production to capitalise on Europe’s push to wean itself off Russian energy.
Sasol is focusing on green hydrogen – made by machines that are powered by the wind and sun.
The company is doing a feasibility study that it expects to complete in two years, its chief executive officer, Fleetwood Grobler, announced in April.
'The impetus for renewables like hydrogen has gone up a couple of notches in the last two months,' Grobler told reporters.
‘What in my mind changes is that we should move quicker and faster on our hydrogen plays.'
According to Grobler, the surge in energy demand can help Sasol, which has been converting coal into synthetic products for more than half a century, pivot to cleaner fuels faster.
The company, which is South Africa’s second-biggest polluter, didn’t even have a plan to transition to green energy until a little over a year ago.
The company now aims to reach net-zero emissions by 2050.
The invasion of Ukraine has led European nations to reassess their reliance on Russian gas. The European Union (EU), for example, has doubled its goal for green-hydrogen capacity to 80 gigawatts by 2030. It currently uses less than one gigawatt.
However, it will take at least five years before Sasol can start exporting the fuel.
The key, according to Grobler, will be to bring prices down from about $5.5 a kilogram to $1.
The company plans to take on partners, but he declined to comment further.
However, Reliance Industries Ltd, controlled by Asia’s second-richest man, Mukesh Ambani, is known to be planning to invest $76 billion in such projects.
In recent years, Sasol has struggled with a string of setbacks including an oil price crash and a US expansion of its chemical business that ran over budget.
The US episode caused its debt burden to spiral and pushed Sasol’s stock to a 20-year low, according to a report in BusinessTech magazine.