strenuous . This last point becomes more nuanced when viewed from the perspectives of the indigenous players : the borderless nature of African trade with the AfCFTA in play puts local enterprises at the risk of being subsumed by larger companies , especially those backed by Western corporations ( Paystack , for example , is backed by Stripe ). Experts have suggested that acquisitions and mergers offer a compromising solution to this challenge , but other problems are yet apparent such as the propensity of African governments to develop arbitrary economic policies . The African entrepreneurial space had seen a rise in the adoption of cryptocurrency , especially during the height of the pandemic . The resort to decentralized finance was an inevitable response to the problem of unstable currencies and limited access to foreign exchange .
But the Central Bank of Nigeria had just recently released a circular prohibiting crypto-trading within the Nigerian banking system , thereby limiting the ability of Nigerian businesses to send and receive payments in Bitcoin and alt coins . Similarly , for several months after the AfCFTA went into effect in January 2021 , Nigeria ’ s borders remained close , directly counteracting the very idea of a Free Trade Area .
Kenya has a policy requiring at least 30 % of every ICT company ’ s equity to be owned by its citizens . Some of these policies have the tendency to negatively impact investor confidence . There is a favorable relationship between a Free Trade Area and FDI inflows , but the free trade has to be in practice , with open borders , for example , and not just a nominal arrangement .
Nevertheless , there are a number of viable opportunities for tech startups in the new era of a continent-wide free trade . Emmanuel Paul writing for TechCrunch asserts that “ deepening internet connectivity , easing cross-border payments , creating digital identities , and improving Africa ’ s addressing system ” are some of the challenges to be grappled with under the new dispensation . And what better tools are there to engage these particular problems other than contemporary technology . Free transcontinental movement has also opened up a large market to be serviced by tech-enabled logistics companies .
We can summarize it thus : AfCFTA came to enhance African trade in a way that seemed to cater to the primarily the physical infrastructure . But in the process it has created other problems in soft infrastructure that tech startups have the opportunity to solve while also leveraging the fluid business environment created by the provisions of the agreement .
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