Project Mano: How Bitcoin Could Strengthen Ethiopia's Economy

" Project Mano " is the name of an initiative launched by an anonymous group of Ethiopians to push the Ethiopian government to adopt Bitcoin and include it in its economic plan. The project recently received the support of Bitcoin maximalist Jack Dorsey, the former CEO of Twitter before its acquisition by Elon Musk. As a result, more and more people are discovering Project Mano, and some are drawing inspiration from it to create Bitcoin villages , for example.

The project has resonated strongly with other members of the Bitcoin community , particularly those residing in Africa . This can be explained by geographical proximity, but also, and above all, by the relative similarity of the country's economic situation to that of other countries on the continent.

Project Mano is composed of entrepreneurs and economists based in Ethiopia, convinced that Bitcoin could improve the country's economic and social life. They urge the government in Addis Ababa to follow the pro-Bitcoin policy implemented by President Nayib Bukelé in El Salvador , which made the country the first to accept Bitcoin as legal tender. Closer to home, the Sango initiative in the Central African Republic, led by President Faustin-Archange Touadéra, aims to make Bitcoin a true engine for the national economy.

In this movement, the members of the Mano project have published on their site, a real plea for the adoption of Bitcoin which would then serve to "fight the rise of inequalities and global inflation". The development program is focused on 3 components including bitcoin mining, holding bitcoin in the treasury as well as the backing of bitcoin to the national currency (ETB).

Looking for new opportunities for Ethiopia

Project Mano is taking place within a complex context for Ethiopia, which is experiencing some political difficulties despite the end of the Tigray War in November 2022. Recently, the United States withdrew Ethiopia from the African Growth and Opportunity Act (AGOA) trade program . Washington could therefore indirectly jeopardize a significant portion of Ethiopia's nascent manufacturing sector.

This was a real commercial boon for various companies working in the textile industry. In 2019, Ethiopia exported $3 billion worth of goods to the US, the country's largest export market. Withdrawing from AGOA could cut this amount in half. According to Foreign Policy magazine , this would affect more than 200,000 people involved in this trade.

Thus, Ethiopia is looking for new opportunities to circumvent such a commercial loss, and the Project Mano initiative is also positioned in this perspective.

The Mano project and Bitcoin supporters in the country

Members of Project Mano believe that Bitcoin mining in Ethiopia would pave the way for other protocols specific to decentralized finance. This would give Ethiopian citizens purchasing power in Bitcoin, which would then be a powerful tool in the fight against inflation. Considered by its proponents as a "safe haven" asset, like gold , holding Bitcoin in the national treasury would allow the country to combat the rampant inflation that has plagued Ethiopia for the past decade.

The Bitcoin holding company would then be used as a hedge against the inflation rate of the Ethiopian birr. Furthermore, it has been proposed that the ETB be pegged to the value of Bitcoin so that it could have a price tag independent of international exchange rates. According to World Bank data , Ethiopia is among the fastest-growing economies. However, with growth estimated at around 2% in 2023 and significant inflationary pressure, the country remains far from achieving the development goals set by the UN.

Inflation of the Ethiopian currency (Birr)

In March 2018, the Ethiopian Birr (ETB) was trading at 22 ETB to 1 USD and the exchange in the black market was close to 25 ETB/USD. In the first quarter of 2021, 1 USD is worth almost 46 ETB – almost 55 ETB on the black market.

https://projectmano.com

In search of a new sovereignty

The Biden administration's recent sanction regarding Ethiopia's withdrawal from AGOA has reminded Ethiopians that they can be victims of third country decisions. The foreign superpowers have implemented a sanction which will necessarily affect the Ethiopian population more than the government itself.

It is with this in mind that the Mano project insists on the need to seek a new sovereignty. For the members of the project, this involves the establishment of a strong national currency, which is not subject to the vagaries of monetary policies. The sovereignty of Ethiopians could no longer be dependent on the decision-makers of the SWIFT system (Editor's note: the international financial system).

The activists of Project Mano insist on the need for a currency that is censorship-resistant and cannot be manipulated according to the whims of established economists, as is the case with the US dollar, for example. They therefore advocate the adoption of Bitcoin, which they describe as " sound money ," decentralized, tamper-proof, and uncontrolled (and uncontrollable) by any state. For them, this is the only possible and desirable alternative for Ethiopia and, indeed , for the entire African continent.

It is fitting to recall that the search for sovereignty in Ethiopia echoes the history of the country, which is the only one with Sierra Leone not to have suffered the colonial invasion of foreign powers. Reading this history, the Ethiopian people then seem particularly "apt" to adopt the libertarian currency (in its philosophical foundations at least), which is Bitcoin.

Ethiopia is well positioned to include bitcoin in its development plan

According to members of Project Mano, Ethiopia is at a key moment in its history, ideal for starting to adopt Bitcoin. Here are the main reasons given:

• There is a craze for Bitcoin, cryptocurrencies and blockchain. Ethiopians are increasingly using bitcoin in peer-to-peer exchange platforms like Paxful. Which clearly demonstrates an effective use case.
• The country is experiencing high inflation rates due to the international economic situation and the internet conflict (see Tigray War).
• The trade deficit cannot be solved by traditional investments alone and there is a need to use other forms of financing. Examples include " Volcano Bond » from El Salvador which are the first government bonds financed in Bitcoin.
• The country has a potential energy production estimated at 6 MW which is not currently exploited or even allocated. This energy capacity could be used for bitcoin mining. It is estimated that the installed production could save the course of bitcoin currently, an amount of approximately 4 billion dollars per year in the country.

The GERD (Grand Renaissance Dam) as an anchor for Bitcoin

Ethiopia's pharaonic project, known by the acronym Gerd, refers to the creation of the dam on the Nile which crosses the country. Since its conception with Emperor Haile Selassie, this work has been at the center of political, economic and geostrategic vicissitudes.

Currently, the dam can provide up to 6000 megawatts with the installation of thirteen turbines in action. A capacity of 4000 watts has been allocated to manufacturers collaborating with AGOA. However, these companies having been banned and no longer having commercial partners to exist, the members of Project Mano propose to reuse this energy capacity for Bitcoin mining.

Excess energy production is very often a difficult problem to manage because unexploited energy is simply wasted. Its use may require the creation of additional infrastructure which proves costly to set up and even more so if it is necessary to reach remote areas. The accumulated delay can inevitably increase energy waste and shape a vicious circle of double losses, which is both economic and energetic.

Recently, a subsidiary of the Russian company BitCluster has a project to open a mining center in Addis Ababa to take advantage of the dam's energy.

Bitcoin, as the ultimate development tool for Ethiopia

The proposal from the members of Project Mano is to mine Bitcoin, as this does not require the creation of entirely new infrastructure. Mining equipment could be installed near the GERD, for example, to minimize the need for related infrastructure. Indeed, Bitcoin mining could generate immediate revenue without the need to build transmission lines, for instance. Even better, it could attract new foreign investment and mining companies.

According to Project Mano, the Gerd could finally generate significant income, which would be directly employable and re-injected by the government into the country's economy.

The idea behind it is to be able to create a circular economy based on Bitcoin which would be beneficial for the country and the entire population in the short and long term. It is in this sense that the active members behind the Project Mano initiative urge the government of Addis Ababa to study their proposals. For the moment, no official response has been provided…

—> See the official Project Mano website

See also:

• More and more “Bitcoin villages” are being created all over the world
• Bitcoin Beach: How “El Zonte” became a model for the rest of the world
• Why does Latin America have everything to gain from Bitcoin?
• Sango crypto from Central Africa: Everything you need to know.
• Nayib Bukele: “Stop drinking the Kool-Aid of the elites”
• Russia to open mining center in Addis Ababa