Guest Post
When I was a child in Cameroon, I learned a strange contradiction at school.
One day, our teacher explained, “Cameroon has an immensely rich subsoil. Oil and gas
deposits, cobalt, bauxite, gold, diamonds and iron. Our soils are so fertile that we could
feed more than half of Central Africa.”
The next day, the same professor said, “Cameroon is a developing country. We are poor
and heavily indebted.”
Even as a child, it didn’t seem very coherent to me. Are we so mediocre and unworthy?
How can a country with so much wealth be so poor?
I saw the same contradiction in my village. A man I knew—let’s call him Papa
Jonas owned acres of fertile land. By any reasonable measure, he controlled assets
worth hundreds of thousands of dollars. Yet he lived in a modest house and couldn’t
afford to send his children to school.
He wasn’t lazy. He possessed wealth. He couldn’t use it.
This is the contradiction that haunts Africa. The continent holds 30 per cent of the
world’s mineral reserves. 60 per cent of the world’s uncultivated arable land, which could
feed a large part of the planet. Yet, families like Papa Jonas’s live in what amounts to
poverty.
What “illiquid” really means
Liquidity is the ability to convert an asset into cash quickly and without losing value.
A U.S. Treasury bond is liquid. It can be sold in seconds. You get the market price. A plot
of land in a Cameroonian village might be worth $100,000. But if you need the money
next week, you have a problem. Finding a buyer takes months. Sell in a hurry, and you’ll
lose half the value.
The difference is not in the quantity of value that exists. It is in the ease with which that
value can circulate.
Papa Jonas didn’t need more land. He needed a way to turn his land into money. But the
system wouldn’t allow it. The land wasn’t registered. No bank would accept it as
collateral. His wealth was real. But it was frozen.
This is the hidden reality across Africa. Assets exist. The value is real. But wealth
cannot circulate.
How wealth becomes frozen
Most African economies operate with a banking model inherited from the colonial era.
Banks take deposits and grant loans. That’s all.
Conversely, in a liquid financial system, assets are constantly moving. A pension fund in
California buys bonds in Indonesia. When one leaves, another enters. The market never
stops; it is in perpetual motion.
In much of Africa, markets grind to a halt. A government bond may only be traded a few
times a year. The IMF has documented this: in advanced economies, bond turnover
often exceeds 100 percent annually. In many African markets, it falls below 20 percent.
This difference is not about risk. It’s about architecture.
The same logic applies to minerals. Cameroon has cobalt and oil. But these resources
are extracted, exported, and valued in London or New York. The physical wealth leaves
the country. The financial wealth never arrives.
How tokenization can help unfreeze wealth
This is where tokenization comes in. Not as a magic bullet, but as a practical tool to
unlock trapped value.
Tokenization is the digital representation of an asset on a shared ledger. Instead of a
land title sitting idle in a government office, proof of ownership becomes a verifiable,
transferable, and divisible digital token.
For Papa Jonas, his land could be divided into small parcels. He could sell a fraction to
an investor in another city and use the money for his children. For the cacao farmer, her
warehouse receipt would become a token usable as collateral for a loan or sellable to a
distant buyer. For the small business, an unpaid invoice would become a digital
receivable transferable within days.
Tokenization does not create wealth. It changes the way value moves. It makes assets
divisible, ownership transferable, and settlement faster.
Africa’s problem is not a lack of value. It’s a lack of mechanisms to circulate that value.
Tokenization provides one of those mechanisms.
What would a liquid Africa look like?
Imagine an Africa where value circulates freely.
In this fluid Africa, Papa Jonas would have his land registered on a transparent digital
system. He could sell a portion to an investor in another city and keep the rest for his
children. The land would not move. Only the claim on it would move.
A cocoa farmer would deposit her harvest in a certified warehouse. The warehouse
would issue a digital token. She would use this token as collateral for a loan or sell it to
a buyer in Europe. She would obtain better prices because she would no longer be
forced to sell immediately.
A small business in Douala with a 90-day invoice would convert it into a digital token
and sell it at a small discount. The money would arrive within a few days.
But beyond these examples, a liquid Africa would undergo a more profound
transformation. Governments and economies would become far less dependent on
foreign capital and international financial circuits. Why? Because the wealth lying
dormant on the continent—land, natural resources, businesses, real estate—could finally
be mobilised locally.
Today, a country like Cameroon borrows from international markets at high rates because
its own resources cannot serve as collateral. Through tokenization, a state could
tokenize a portion of its mineral resources or infrastructure. The tokens would be sold
to citizens, the diaspora, and local pension funds. Capital would be raised domestically,
without the need for foreign intermediaries. Dependence on international financial
institutions would decrease, and economic sovereignty would increase.
A liquid Africa uses its own wealth to finance its own development. None of
this requires magic. It’s about building systems that recognize existing value, make
ownership verifiable, and allow for transferability.
The land is there. The minerals are there. The people are there. What’s missing is the
infrastructure to circulate this wealth. Tokenization can help build that infrastructure.
The rest is up to us.
By Charles Awanda*
