South Africans have the highest annual crypto purchasing power, surpassing Africa’s crypto capital Nigeria, according to a new study that surveyed four African countries.

Crypto traders in the country spend $51.38 on average every year, according to the Meltwater Digital 2023 Global Overview Report.

Morocco, Kenya, and Nigeria have an average annual spending of $33.07, $16.08, and $14.76 respectively. This is significantly low compared to Switzerland, which is at the highest average annual spend per user of $960.7.

South Africa also leads the continent in the percentage of the Internet users aged 16 to 64 that holds crypto, at 18%. Nigeria follows at 13%, Kenya at 12%, and Morocco at 4.5%. However, Nigeria leads in the total number of people holding crypto, given that it has a population of over 220 million – almost four times South Africa’s population.

(A capture from the Meltwater Digital 2023 Global Overview Report)

This means that even though there are a lot of people in Kenya, South Africa, and Nigeria who own crypto assets, the value they hold is low compared to developed economies.

South Africans’ willingness to spend more in crypto is largely attributable to its upper middle-class economic status, with a GDP per capita (Purchasing Power Parity basis) of $14,624. This is compared to Morocco’s $8,852, Nigeria’s $5,408, and Kenya’s $5,211, according to World Bank’s data of 2021.

The research is in tandem with Tripple-A’s Crypto ownership data which states that Kenya has over 6 million crypto users.

“As of 2022, Kenya remains one of the three largest Bitcoin markets in the African continent, standing alongside crypto giants such as Nigeria and South Africa,” the Tripple-A report denotes. Nigeria is estimated to have 22 million crypto users as of the end of 2022. South Africa has an estimated 5.8 million crypto users.

The Meltwater research also shows that African countries are still trailing in NFT ownership compared to the rest of the world. South Africa, Morocco, Kenya, and Nigeria have an NFT annual average spend of $16.06, $9.96, $6.78, and $5.58 respectively.

Buying Small

(A capture from the Meltwater Digital 2023 Global Overview Report)

Moyo Sodipo, co-founder and COO of Lagos-based crypto trading platform Busha, tells Nodo News that low purchasing power in emerging markets like Kenya and Nigeria affects crypto ownership levels.

“If you look at the wealth structure of these countries, most of the citizens do not have very high purchasing power,” he says. “So, they naturally would not be able to put more than a lot of their disposable income into cryptocurrency.”

Michael Adeyeri, co-founder and CEO of Busha, also states that African users would typically use cryptocurrency for utilities, a contrast from developed regions.

“They’re either trying to do remittance or trying to pay for something,” Adeyeri explains. “In other parts of the world, people use crypto mainly for speculative reasons.” He adds that people in developed regions buy crypto with the intention of seeing it appreciate and not for speculative purposes as it happens with most African crypto enthusiasts.

-Edited by Faustine Ngila
(Updated GPD per capita figures in the sixth paragraph)