• Michael Dynes

A cryptocurrency for entrepreneurial Africa

What innovative funding solutions are needed to mobilise substantially greater

financial resources to help drive economic development in the world’s poorest

countries – especially those in sub-Saharan Africa?

Solutions to this conundrum have become ever more pressing in the decade since

the 2008 financial crisis, which have seen Western overseas development aid fall

year-on-year from its 2010 peak of $128.7 billion as cash-strapped governments

rein-in their spending.

At present, only two countries – Germany and the United Kingdom – have ever

reached the UN target of earmarking the equivalent of 0.7% of their gross

domestic product for international aid flows, and both countries have seen

mounting opposition to the size of their foreign aid budgets. An alternative source

of funding must now be identified.

Rapid rise of cryptocurrencies

The rapid rise of cryptocurrencies make them a compelling source of new funding

for start-ups. More than 200 coins were issued in 2017, raising some $3.9 billion

for start-ups and early stage companies. Those who thought that ICOs had peaked

in 2017 have already been proved wrong.

In the first quarter of 2018, around 150 coins have been floated. Collectively, they

have raised $4.7 billion for start-ups and early stage businesses, making them a

more important source of funding than venture capital. It looks like 2018 is on

target for being the record year for ICOs. Private capital is an enormous source of global wealth but it has not historically played a significant role in addressing the needs of the so-called bottom billion.

Efforts to redress this market failure are now at the centre of an emerging private

sector-led development drive.

Reaching the bottom billion

Robert Pyke, CEO of the Aziza Project, an organisation that is seeking to boost

the success rate of start-ups in African countries, said: “Private capital is always

looking for investment opportunities but only backs those prospects that meet its

appetite for risk and reward.”

But there is a catch. “Investors seek good returns but are extremely wary of the

risks associated with start-ups and small and medium enterprises,” Pyke said,

adding: “There is a paradox here. Start-ups can provide high returns. But investors

are put off by the high risks involved.”

Squaring that circle lies at the heart of the Aziza Project’s attempts to make start-

ups more attractive to private investors. According to Pyke: “Start-ups play a

uniquely critical role in any economy in terms of job creation and wealth


“This is all the more important in circumstances where governments are looking to

make reductions in public expenditure, and big corporates are seeking to improve

their profitability – sometimes at the expense of headcount,” Pyke said.

Rollout of the Aziza digital currency

One prospective solution is the rollout of the Aziza digital currency which is

designed to boost job creation by providing start-ups with a broad range of

business services they need to become viable, thereby making them more attractive

to investors.

“The Aziza digital currency is aiming to ride the cryptocurrency wave to raise

finance to invest exclusively in start-ups that that will provide investors with

superior returns,” Pyke said. “What makes the Aziza digital currency different is

that it will own an equity share of these start-ups and provide support services to

enable them to grow.”

Pyke added: “Our ambition is to provide support services in finance, banking, tax

and accounting, legal and intellectual property management, human resources, IT

and marketing at a higher quality and a lower cost than a start-up or entrepreneur

could achieve themselves.”

Support for Africa New Energies

The first start-up being supported is Africa New Energies (ANE), which has title

to 22,000 square kilometres of an onshore prospective hydrocarbon concession in

Namibia – an area the size of Wales – along with supportive airborne data and

geochemical evidence of hydrocarbons – both oil & gas.

Pyke said: “ANE has also developed innovative exploration techniques needed to

search for oil and gas across its Namibian concession at a third of the cost of

traditional hydrocarbon exploration techniques, and with ten times the likelihood

of success.”

In addition, “ANE has also worked hard to create long-term relationships with

central government and local communities. Giving the company access to

infrastructure, vital local geological insight and concessionary fiscal terms,” he said.

“Finance raised from the Aziza digital currency sale will fund the implementation

of a ten-well drilling programme,” Pyke said, “which if successful, will help fund

the construction of a hybrid gas-to-solar power plant that will supply low-cost

electricity to the local grid, that will in turn deliver a massive stimulus to the

Namibian economy, boosting job creation in the process.”

Pyke added: “The ultimate goal is to use Namibia as a proof of concept, then

replicate the achievement in other countries across the continent, and in the

process light up Africa and thereby bring electricity to the 630 million Africans

who currently have no access to the grid.”

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