Why stablecoins and AI are key to the next financial leap in Africa
Plus what do investors want to see in African AI startups, and two ways we create thought partners and templates to enhance your production workflows.
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Buying NFTs in 2021, Dont Ask
Why Stablecoins in Africa.
I’ve been an advocate for a very long time.
You can settle intra-African payments instantly without traditional banking rails
Companies can also hold Stablecoins for treasury management, avoiding the complexity of holding multiple fiat currencies.
Huge amounts of money can be saved in remittances to Africa
A stablecoin is a cryptocurrency designed to maintain a stable value relative to a reference asset, typically the US dollar. Think of it as digital money that tries to behave like traditional currency rather than the volatile roller coaster of Bitcoin or Ethereum.
How They Work
Traditional cryptocurrencies fluctuate like crazy. Imagine trying to buy coffee with Bitcoin when its value swings 10% in an hour. Stablecoins (I hold USDC) solve this by anchoring their value to stable assets, making them practical for everyday transactions.
For every stablecoin issued, there's supposedly a dollar sitting in a bank account. USDC operates this way. Circle (which I hold) claims they hold actual dollars backing each coin. Tether, there’s some debate about. Other Stables are backed by other cryptocurrencies. And others have been algorithmic. This means : no backing assets. What happens here is that smart contracts automatically adjust supply based on demand. Sort of like a central bank algorithm. Terra's UST tried this approach before its spectacular collapse. (I had sold this just before thank goodness)
Are the ingredients for Africa's new financial architecture falling into place already?
I strongly suggest reading this piece by Vera Songwe on How the How the US’s stablecoin policy can benefit Africa. Vera is the Chair and Founder of the Liquidity and Sustainability Facility (LSF). The LSF is a facility designed to provide emerging countries with access to liquidity and sustainability.
She says that the continent is set to gain from the GENIUS Act in the US and its accidental impact on remittances She argues here that there are potential benefits of the US's stablecoin policy for African nations, particularly concerning remittances.
Africa currently faces high remittance transfer costs, losing billions annually. These excessive costs drain billions from families and small businesses across the continent.
A proposed US tax on remittances that could further burden African families.
However the legalization of dollar-backed stablecoins through the GENIUS Act offers a significant opportunity to reduce these costs, as stablecoin transfers are considerably cheaper.
African countries should embrace this new financial architecture by developing regulatory frameworks, supporting diversified stablecoin projects, and investing in digital infrastructure to foster economic growth and financial inclusion
Here’s an explainer w Notebook LM Video Feature
The Next Financial Leap
AI's real impact could come from analyzing mobile wallet data to assess creditworthiness for Africa's underbanked population. Instead of requiring payslips or formal credit histories, AI can evaluate utility payments, local shopping patterns, and salary deposits through digital wallets to determine financial reliability. This enables micro-lending, insurance, and savings products for people operating outside traditional banking systems.
However, infrastructure gaps are still massive barriers. Many African markets rely heavily on cash with limited point-of-sale terminals and mobile data access.
Users can send stable digital currency directly to recipients without sourcing foreign exchange liquidity or navigating banking correspondent relationships. So stablecoins can solve the speed and cost problems of cross-border transfers, while AI unlocks credit access for millions using alternative data sources.
Big Tech's "AI for good" spending increases in Africa. So does skepticism of their motives.
Shikoh Gitau, CEO of Nairobi-based Qhala, told Rest of World that the Googles and Microsofts and Metas offer free health services to extract data from African users: "They are commercial organizations and they're here to win the commercial race." The strategy is straightforward, provide useful tools that African communities desperately need, then harvest the resulting user data to improve their AI models.
McKinsey predicts AI could unlock $100 billion annually for Africa, but Western companies are positioning themselves to control both the infrastructure and the data.
Africa gets the social services; Silicon Valley gets the competitive advantage and future revenue streams.
AI Will Create Over 200M Digital Jobs In Africa, Mastercard whitepaper
Mastercard is pushing hard into African markets with a new whitepaper projecting 230 million AI jobs by 2030. They're looking at countries skipping traditional banking infrastructure and want to adopt AI-driven fintech services directly. For instance:
Tala in Kenya uses call patterns and SMS frequency to assess loan risk for people with zero credit history.
Nigeria's Kudi.ai processes microfinance applications through WhatsApp.
What do investors want to see in African AI startups?
African AI investors seem to be split into two camps
The first group looks for gaps that Silicon Valley can't fill, Arabic language processing, speech recognition for Yoruba, or AI tools that work on feature phones with patchy internet.
Enza Capital invested $3 million in Egypt's Widebot AI specifically because they're training models on Arabic text and speech patterns that OpenAI and Google don't have access to.
Atlantica Ventures funded Lelapa for $2.5 million to build similar models for African languages.
These investors bet that local data creates permanent competitive advantages because OpenAI and Anthropic can't replicate that local data and context.
The second camp is looking for start ups that are already successful that are introducing and implementing AI.
Capria Ventures for example only funds established companies like Moniepoint and Helium Health that are embedding AI into already-profitable fintech and healthtech operations. Their logic: why compete from scratch when you can use existing AI tools to enhance existing African businesses?
B2B models get funded because they generate predictable revenue
Consumer AI apps are struggling to attract investment despite Africa's young, tech-savvy population.
With only 16 African countries having AI policies, early movers face regulatory uncertainty but also major advantages in being first movers in undefined markets.
The Rundown Studio has first mover advantage in how we think about applying AI to comms niches.
Here’s our Podcast in Your Pocket. It makes the whole podcast research, editorial and production easy.
Africa's Most Promising AI startups and their real-world impact
Four African countries - Nigeria, Kenya, South Africa, and Egypt - capture 83% of continental AI funding while hosting over 230 AI-specific startups. South Africa leads with 600+ AI firms, followed by Nigeria (400+) and Egypt (200+).
Healthcare and biotech dominate the list:
Nigeria's Intron Health raised $1.6 million for speech-to-text tools handling 200+ African accents, accelerating clinical documentation by 6x.
Egypt's Proteinea ($590k raised) uses deep learning to shorten drug development cycles for pharmaceutical independence.
Ghana's Yemaachi Biotechnology secured $3 million for AI cancer diagnostics tailored to African genetic profiles.
Financial services and data analytics show strong investment:
Ghana's Oze raised $3 million for SME analytics bridging informal enterprises with formal banking.
South Africa's Xineoh ($3.5 million) helps retailers optimize stock by predicting customer behavior in emerging markets with incomplete data.
Kenya's Sama AI raised $70 million in 2021 for data annotation services employing East African workers.
Nigeria's ZeroComplex AI gained pre-seed backing for "AI Workflows" that help businesses integrate artificial intelligence through simple interfaces.
Manufacturing and language processing
South Africa's DataProphet raised $16 million total for manufacturing optimization reducing factory defects, making it one of Africa's most funded industrial AI startups.
Lelapa AI secured $2.5 million to build InkubaLM, a multilingual language model for African languages. (Check out my interview with Prof. Marivate from Lepala on The Embedded Podcast here)
Pan-African Zindi raised $1.95 million for crowdsourced data science competitions connecting African AI talent with business challenges. ( I spoke to the Co-Founder of Zindi for Embedded as well - you can give it a listen here)
AI is Supercharging Creatives
Nigerian producer Nkasi created a nine-track Afrobeats album using AI in three days for $500, work that would normally take months and thousands of dollars in studio time.
Africa's creative economy reached $58 billion in 2022, with Nigeria alone contributing $5.6 billion to GDP and targeting $100 billion by 2030. Right now the majority of the world's perception of African music, art, and film stems from Nigeria. Now the rest of the continent has a chance to level the playing field.
Visual artist Malik Afegbua breaks down the reality of using AI:
If I'm a photographer and I add AI to my photography, I can offer extended backgrounds, change lighting or clothing, and deliver 100 variations of an image that used to take me hours in Photoshop.
Digital creator Miss Techy runs five AI tools simultaneously when scripting - ChatGPT, Grok, DeepSeek, Claude, and Midjourney , but never copies outputs directly.
But…
While creators in Lagos, Nairobi, and Accra produce cinema-level content with smart prompts, many in Africa lack access to tools, internet, or training (for now)
Thanks for reading !