The price of the top digital currency is well above the means of many, especially in Africa. A Bitcoin in Nigeria, for example, is now worth over N3 mln. This is a far reach in a country where half of its approximately 200 million people live on less than N800 (about $2) a day.
UNDP puts 50.9% of Nigeria’s population as multidimensionally poor. An additional 18.4% of the population is considered to be nearly so. Nigeria’s current minimum wage stands at N18,000 (about $60) monthly.
These figures from Nigeria reflect the reality of many other African countries. Ghana recently introduced a new daily minimum wage of 9.68 cedis (about $2.20) up from 8.80 cedis.. In Kenya, the minimum wage was raised recently from Kshs 10,955 to Kshs 12,926 (about $125).
When compared to the UK where the minimum wage per hour is £6.50 (about $8.50), it is clear that not many Africans would be able to acquire an entire Bitcoin. The currency’s rising price may further discourage new people from jumping on its train. Yet, the urge to participate in the growing crypto ecosystem is increasing among many Africans.
The appeal of ICOs
Some of them now look to Initial Coin Offerings, which present Africans with a unique opportunity. Though the crowdfunding model requires caution due to increasing numbers of scams, its benefits seem to outweigh the downsides for many Africans. Basically, ICOs enable Africans to start and invest in projects with global appeal that are considerably less expensive than Bitcoin. Additionally, ICOs help Africans ensure their relevance in a global crypto-led financial evolution.
Founds speak up
Bashir Aminu, the founder of Cryptogene, writes:
“I think ICOs are crucial for the success of start-ups especially in places like Africa where access to traditional funding is extremely difficult. ICOs give startups the much needed head start to carry out and implement their products.”
Aminu believes ICOs are relatively unknown in Nigeria and are often confused with fraudulent schemes. He points out that it would be difficult to launch a Blockchain startup in the country without an ICO, because getting funding from banks is nearly impossible.
Marcus Adetola, co-founder of Potentiam, shares a similar view. He believes the ICO method presents a more user-friendly and easy public participation mechanism for fundraising. However, as a new global phenomenon with awareness still in infancy, Adetola notes that more time is needed for people to understand ICOs’ function and purpose:
“So the advice would be for people to educate themselves about ICOs and how they can use this new method to raise funds like never before, especially in Africa.”
Mounir Belaid, the co-founder at Sandfox Studio in Casablanca, has been encouraged by the interest ICOs have gained in Morocco. It has made pushing for this form of fundraising for local projects easier. Though bound by certain regulations, this new fundraising method is most needed to promote innovative project in the continent, Belaid says.
He explained that ICOs are the best possible promoter of Blockchain-based projects as they help draw global investors to Africa to improve local communities. He adds that ICOs that become successful will help gain governments’ attention to Blockchain technology and they will also motivate more Africans to innovate in the space to solve local problems.
“ICOs will help us to realize our projects more quickly. But with or without an ICO, we would realize them. It may just take more time.”