Two fantastic pieces of content on Francophone Africa and fintech were published this week, which I highly recommend reading.
The first is a project produced by MFS Africa, entitled Togo Crossing Borders. The three-part series explores the history of the country – an entrepôt1 in the West Africa – and the second-order effects of its economic and geographic makeup on citizens in the region.
With have a population of just over 8 million, and a nominal GDP of $5.49 billion, per the World Bank, Togo relies heavily on trade with neighboring Ghana, Benin, and further to the east, Nigeria. Its capital, Lomé, sits on a land border with Ghana, from which 40% of Togo’s remittance inflows come.
Four countries across less than 200 kilometers of the Gulf of Guinea – through which goods, people, and money flow – using three different currencies. At the Ghana-Togo border, interoperability looks like this:
Very clearly, policy and the reality on the ground are in conflict.
[The Ghanian fisherman in living in Togo]’s complicated money transfer routine points to a contradiction at the heart of Togo and Ghana’s relations.
Despite their proximity, the two neighbors often feel far apart.
The complicated nature of Togo and Ghana’s borders has created a paradoxical relationship. Like in many African countries, the borders that have defined Togo and Ghana relations are fluid. They change depending on the context. On a top-down level, whether economic policy or state matters, borders are fixed and rigid.
However, on the ground, they are supple and porous, particularly on a human level.
The fragmentation issue is even more acute when we look at remittances. Inflows account for around nine percent of Togo’s GDP, yet Africa remains the most expensive continent to send money to. According to the World Bank, it costs over 8% to send $200 to a Sub-Saharan country, whereas the global average is down to 6.38%.
MFS Africa endeavors to “make borders matter less” – their platform makes mobile wallets interoperable across the continent, and initiatives like AfCFTA will (hopefully) make borders matter less, as well. But perhaps we should take this conversation one step further…
The second fantastic piece of content is a devastating essay published in Bitcoin Magazine, entitled Fighting Monetary Colonialism with Open-Source Code, on the CFA franc and French neo-colonialism. The piece gives a history of the ways in which the CFA still benefits France – the metropole2 – which simultaneously hamper the development of Francophone African nations and has, in effect, prevented them from truly gaining their sovereignty. Notwithstanding the African nations’ lack of control over monetary policy, France has also supported authoritarian rulers who pledge fealty to the CFA.
This, the essay argues, underscores the importance of Bitcoin in this region.
Not only is cryptocurrency a tool for interoperability, or preservation of wealth in environments of devaluation, or a means of quicker or cheaper cross-border transfers, but in the context of the CFA, it’s believed to be a means of achieving national sovereignty.
Personally, I’ve become increasingly convinced of the inevitability of crypto’s ubiquity, particularly given its superior utility to traditional financial institutions and technologies.
However, looking through a cynical lens, it’s no wonder why governments – particularly those cut from a less democratic cloth – want to restrict its ease of acquisition and/or develop centralized digital currencies for themselves. After all, if social media can start revolutions, imagine what crypto can do!
So what happens when an immovable object meets an unstoppable force?
Thanks for reading 🙏