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Challenges facing blockchain adoption in Africa


Blockchain is a digital ledger that is decentralized and stores everything of value that is recorded in the blocks. Data recorded in the blocks is stored permanently with minimum risk of hacking or manipulation. Blockchain uses peer-to-peer network that enables parties involved to carry transactions directly without the need of third parties.

Blockchain technology is believed to be the holder of the key to a digital economy in Africa and the world at large. This revolutionary technology has the enormity to improve financial services in all industries globally, eliminate the high costs of doing transactions, and enable faster, secure transactions.  Additionally, it can help in ensuring data and records are stored safely in an immutable digital ledger.

Despite having multiple advantages, there are some challenges that hinder blockchains’ easy and quick adoption. They include:


Truth be told, blockchain technology is complex. Understanding every bit of what it entails requires a lot of time. Thus, for one to understand it fully and make up the decision of adopting it in his or her business, one must invest a lot of time to study and research about it. The complexity of blockchain starts with its terminologies. It involves a whole lot of vocabularies that needs to be seriously studied for one to have a clue of what they mean. Additionally, one needs to understand how the blockchain is created and how it works before deploying it in order to reap many benefits from it. Understanding all this and putting it into practice can be a nightmare to many, thus, most people decide to stay away from adopting it as it is too complex to handle. Furthermore, the process of buying, storing and sending cryptocurrencies is still complicated. Majority of the current exchanges  where people can buy/sell cryptocurrencies are not suited for local markets in Africa because of the complex account verification process. It is not easy to set up a web-wallet for an ordinary person. There are also different wallets for different cryptocurrencies and therefore a person may need many wallets for storing different coins which is not efficient.


Regulation systems usually delay technology innovation. Blockchain technology adoption requires some applications that need standard regulations. There are certain key aspects in the technology that attracts the attention of a country’s central authority, that is, the government.  Such key aspects include virtual currencies, data encryption, identity management, taxation, defrauding/theft, money laundering and other illegal activities. For instance, the Central Bank of Kenya warned the Kenyan citizens against trading bitcoin citing that it was a pyramid scheme. However, good news is that many consortiums are evaluating this revolutionary technology to ensure that it can be trusted for securing private data and information. In Kenya, the ministry of ICT even announced it is forming a taskforce to evaluate potential of blockchain and artificial intelligence.

It is hard to deploy blockchain technology especially in areas where the state government has to regulate its use. In most cases, the adoption is delayed because the regulations have to be passed through parliament and for it to be enforced it must be supported by majority legislators. Central Banks and governments in some  African countries have discouraged the use and trade of bitcoins, which are created through blockchain technology, but are in support of adopting the technology itself making the adoption of this technology even more challenging.


In the traditional way of storing data in the cloud, one pays a monthly fee upfront for a certain storage space. During that month, you can store data up to the set limit. Once the paid time expires, you renew the payment for another period if not; all your files are deleted. With blockchain databases, this model does not apply. For the data to be stored permanently in the cloud, you must do a one-off payment that covers the whole period that your files will be stored. The amount needed is huge and this act as a challenge for blockchain adoption because the capital required is huge.

For instance, storing a 1GB worth of data in Ethereum blockchain is expensive. more here. Such an amount is hard to come up with especially for industries and startups that require more than one GB to store all its data and records. Apart from the cost for storing data in the cloud, there are other costs to be incurred such as blockchain development, deployment and system integration, which will amount to a very huge amount of money that cannot be, raised at one go.

Need for more validation

Another challenge hindering blockchain adoption is the fear by executives who perceive that the technology has not been fully tested in pilots and proof of concepts (POCs). Initial POCs approve its scalability but do not exactly explain the disadvantages of dealing with enormous transactions and data of an enterprise. As adoption of blockchain technology increases, different applications will face different scalability issues. In addition, the exact time to be used and the amount of power to be consumed when processing many transactions are yet to be determined.

The initial Proof-of-concepts prove blockchains security for immutable transactions. However, some executives are not certain if it is impossible to share the private information on the blockchain with other sources outside the blockchain. This raises the question whether this technology can be fully trusted.

Internet connectivity

You cannot use blockchain technology without a computer or smartphone and good internet connection. Only 31.2% of the total population in Africa has access to internet connection. Despite the growing number of internet users in the continent, the framework for internet access needs to be established. Poor internet connectivity is a great challenge that hinders or slows the adoption of blockchain technology in developing countries because without good internet connection, it is impossible to deploy blockchain technology.

Moreover, people in the developing countries are not tech-savvy.  Adopting modern technology is a great challenge, as most perceive it to be some Ponzi scheme or a pyramid scheme. Additionally, there is lack knowledge and adequate modern equipment to deploy the technology.

Combined hurdles

Adopting blockchain technology requires significant change or elimination of the existing systems. For this to happen, the entire ecosystem, not only banks and other financial institutions must be prepared for the evolution. Most African countries are underdeveloped; hence conducting business in them involves a very tiresome process that involves many stakeholders. Take a case where you have to buy rice from Kenya and export it to Australia. The number of stakeholders whom you will have to deal with is countless: from the rice farmer, tax collectors, suppliers, regulators, licensers, certificate authorities to end customers. How to make all these stakeholders involved in the line of your business to use and trust blockchain technology is a question that is yet to be answered.

Blockchain technology is known in African countries. Some countries have embraced the technology while others are speculating about it. For easy adoption of global blockchain technology, the above challenges must be dealt with.

Progress is being made in terms of raising awareness about crypto and blockchain especially in the case of Africa. You can check out this comprehensive post about top crypto websites in Africa.


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