According to a recent report, investment in blockchain startups in Africa fell drastically in the first half of 2024. Total funding reached just $26 million, down 74% on the same period the previous year.
This worrying trend can be explained by several factors, including global economic uncertainties and the persistent challenges facing the African technology ecosystem. Despite this, experts remain convinced of the long-term potential of blockchain on the continent.
A sharp drop in investment
According to the compiled data, African blockchain startups raised just $26 million in the first half of 2024, compared with $100 million over the same period in 2023. This represents a 74% year-on-year drop in funding.
This decline was due in particular to the difficult economic climate, marked by high inflation, rising interest rates and geopolitical uncertainties. Investors were more cautious in their capital allocations, favoring more mature and less risky sectors.
Continuing challenges for the African tech ecosystem
Beyond the macroeconomic context, the drop in blockchain investment in Africa also reflects the structural challenges facing the continent’s technology ecosystem. Despite the progress made, African startups are still struggling to attract substantial funding, due in particular to a lack of infrastructure, weak local innovation ecosystems and regulatory gaps. These obstacles are holding back the emergence of African champions in disruptive technologies such as blockchain.
Long-term potential still intact
Despite this cyclical setback, experts remain convinced of the long-term potential of blockchain in Africa. The technology has many promising applications for tackling the continent’s challenges, from financial inclusion to improved governance.
Some observers believe that blockchain could even become a strategic lever for attracting new foreign investment to Africa. But for this to happen, countries will need to tackle regulatory hurdles and develop more mature and attractive innovation ecosystems.
