Sub-Saharan Africa is hit hard by the climate crises and the economic consequences of the pandemic. Furthermore, some statisticians fear that Africa’s population will double by 2050 and quadruple by 2100 (source). Extreme poverty is growing and, in the short term, the African continent will experience serious problems. Many of the artificial nation-states created by the colonial powers are likely to go bankrupt and disintegrate (source).
But the continent is favored by an abundance of solar energy as well as considerable human and natural resources, that, with the help of new technology, could make Africa the continent of the future.
Basically, the future of the African continent depends on the ability to convert the abundant solar power into food, water, energy, fertilizer, communication, reforestation, and education. Africa is one big power-to-X project.
Africa is “cosmopolitan”, and the economy is informal – neither regulated, nor controlled by a state. Africans are the most multilingual people in the world, they have a high degree of religious tolerance and are generous and hospitable to strangers.
But most of them don’t have credit cards and they don’t trust each other. They are just waiting for Web3 and it’s ability to handle values and build trust between strangers. The continent is ready to skip industrialism and go straight to a post-capitalism where institution are replaced by algorithms (source). Africa can potentially leapfrog “Western civilization”.
The Networked Continent
Africans already skipped development stages with the mobile phone, and they are global leaders in bank-less digital payments (source).
Now solar energy can lead to an even bigger jump forward. Rural areas are being electrified with “off grid” solar energy whereby hundreds of millions of peasants get electricity and access to the Internet.
Since Africa is not hampered by a lot of existing institutions slowing down innovation, they can move very quickly to Web3. When Africans get a “Internet ID” and a deed on their house and their land, they get access to collateralized on-line loans, digital cash, smart contracts, and e-commerce just as we have in Europe. Entrepreneurship and local economies will flourish.
In 2002, my wife and I arrived in Pemba, northern Mozambique, to work on a development aid project. It was the day before the mobile network was launched and, all who could afford it, walked around with a telephone in hand and kept an eye on the new transmitter masts.
The next morning, when the signal came on, they started calling each other, and despite the fact that a large part of the population was illiterate, they quickly learned to send text messages.
The phones were quite cheap, so the prepaid calls turned out to be the expensive part. However, if you had no “credit” on your phone, you could send a free “beep”, which meant, you wanted to be called. Soon after, it was discovered that prepaid credit could be transferred from one telephone to another. In this way, mobile payments were invented as part of the most accelerated development process I have experienced in my years in Africa.
Everything can be repaired and recycled, and, thanks to the mobile phones, there are skilled self-employed craftsmen available 24/7.
As part of the colonial heritage, Africans are highly skeptical of state authorities. Instead, they rely on the extended family and the tribal elders.
And the tribes are ready to take over from the corrupt nation-states. In fact, they never relinquished power – the colonial powers – and the aid organizations – just did not notice it.
The African tribes already live relatively peacefully together, so it will be no problem for tribal-based nations to share territories. The may well abide by common traffic laws while having their own tokens, their own education system, and their own health insurance.
Traditional African agriculture contributes twice to global warming. First through direct emissions of greenhouse gases from cattle farming and slash-and-burn agriculture, and then through deforestation, which for the most part is a result of the same agricultural activities.
If we manage to reforest the African continent, the effect on climate and biodiversity is estimated to be bigger than the effect of all the solar cells and wind turbines of the World (source).
The land is traditionally cultivated by women, and, as it is well known, education and prosperity for women is the best form of family planning. To raise productivity, women need to learn that an agricultural robot can be a better investment than an extra child.
As food gradually becomes farm-free and the amount of farmland in the World starts to decrease, CO2 could become the next cash crop for African peasants who potentially could reforest the whole continent financed by carbon credits (market-based carbon taxes).
In this case, a credit token would be minted by a community DAO each time a custodian satellite monitoring system – like Climate Trace – confirms that the number of cattle is reduced corresponding to the emission of one tonne of CO2 or the members have planted trees equivalent to the uptake of one tonne of CO2. The credits are sold on the open market or can even be used to back a stable coin like Klima DAO.
The climate crisis exhibits our lack of global understanding. For example, it makes no sense to base the Danish climate strategy on the production of e-fuels from electricity produced by wind turbines on Danish territory. As we know, global warming does not care about national borders, so why not invest the same money in solar cells in the Sahara? It is more efficient and much cheaper. The ships that transport – and burn! – the green fuels, still sail close by.
E-fuels could become another cash-crop in Africa. Again, the model could be to organize cooperatives, which assemble, clean and maintain the solar panels. The investment can be crowdfunded so that we in Europe buy NFT panels, that are put up in the Sahara instead of on our cold rooftops in the North.
Solar farming can possibly be combined with an African variant of vertical farming where the plants are grown in the shade of the solar panels and drip irrigated with water extracted from the air or through desalination.
How Europe Can Bootstrap Africa
As we in Europe will be slowed down by many old institutions resisting to change, we should bet on Africa. The alternative – not doing anything – is not attractive, as Europe will be the destination for colossal refugee and migrant flows if the climate and population crisis runs free in Africa.
In addition, we have the advantage over our Chinese competitors, who strategically invest heavily in Africa, that many European countries have strong linguistic and commercial ties with their former African colonies.
Finally we have the tools to stimulate real development. Much of the old-fashioned development aid end up in the wrong pockets; but now we have technology able put the money directly into the pockets of the poor; and when the poor get money, they spend it and create real development.
We could offer to airdrop a small “basic income” of one Euro a day to all adult in Sub-Saharan Africa (corresponding to approx. 2% of the EU GDP). Such a program will boost Web3, put an end to extreme poverty, dampen migration, reduce the fertility rate, and bootstrap African entrepreneurship.
This digital cash, which could be a programmable stablecoin pegged to the Euro, will outperform the dollar as a reserve currency in Africa and should be transferred directly from the European Central Bank to people’s phones, bypassing governments and other intermediaries. It can be freely spent and must be immediately exchangeable with local currencies. The coin can be programmed in such a way that it, outside Africa, only can be spent on purchases in the EU.
The program is a purely monetary operation, which does not necessarily lead to increased taxes in the EU. It is similar to what the Americans have been doing for the last 50 years: print a lot of money and increase the international demand for your goods and services without increasing the domestic money supply.