IDC expects blockchain spending in the Middle East and Africa (MEA) to more than double this year, totaling $80.8 million for 2018, up 107% on the $38.9 million spent in 2017. Looking further ahead, IDC expects blockchain spending in MEA to reach $307 million in 2021, which represents a compound annual growth rate (CAGR) of 77.4% for the 2016-2021 period.
“There is clearly an immense amount of interest around distributed ledger technologies (DLT) in the region,” says Megha Kumar, IDC’s research director for software in the Middle East, Africa, and Turkey. “This is being driven by the pressing need for organizations to improve their efficiency, agility, security, and integrity. In 2018, we expect more organizations across MEA to move beyond the evaluation and proof-of-concept phase to pilots and even deployments.”
While various industries are evaluating the use of blockchain, IDC research suggests the region’s public sector (including government, education, and healthcare) will spend an estimated $120.8 million in this space in 2021, accounting for 39.2% share. It will be followed by the financial services sector at 35.5% and the distribution and services sector at 14.1%.
“In the Middle East, Dubai’s government has identified blockchain as a major technology for helping it become a leader in the Smart Cities arena,” says Kumar. “Alongside the establishment of the Global Blockchain Council, Dubai’s ‘Blockchain Strategy’ aims to promote efficiency around government services and fuel economic development. At the same time, financial services firms across the region are evaluating the use of blockchain for cross-border payments, trade settlements, and anti-money laundering purposes. In Africa, meanwhile, DeBeers intends to launch an industry-wide blockchain platform for tracing and authenticating diamonds, which highlights the integrity benefits of the technology.”
From a technology perspective, IDC’s forecast shows services (IT services and business services) accounting for 52.7% of MEA blockchain spending in 2021. Blockchain software platforms will be the biggest and fastest-growing category in the software space over the coming years, while cloud will be the fastest-growing component in terms of hardware.