In his recent article, Africa May Be Blockchain’s Most Mispriced Market, Rob Downes, Head of Digital Assets at ABSA Corporate and Investment Banking, argues that Nigeria and Africa are becoming increasingly attractive blockchain markets despite attracting a disproportionately small share of global investment.
He says the continent’s blockchain ecosystem is maturing, driven by practical solutions in payments, trade, lending and digital identity, alongside improving regulation.
Using Nigeria’s Kredete as an example, he contends that Africa is generating strong innovation and deal activity but still lacks the large-scale capital needed to help startups scale.
Downes maintains that with its young population, expanding fintech ecosystem and improving regulatory environment, Africa remains “blockchain’s most mispriced market” and presents a compelling investment opportunity that global investors can no longer afford to ignore.
In this follow-up interview with Pinnacle Daily, he discusses why Nigeria is well-positioned to attract greater blockchain investment, the policy changes needed to unlock larger funding rounds, and the sectors he believes will drive the next wave of growth across the continent.
Pinnacle Daily: You describe Africa as blockchain’s “most mispriced market.” What specific factors do you think global investors are missing, especially in Nigeria?
Downes: Primarily, they are missing the depth of opportunity across our continent. We have a young population with a track record of adopting new technologies early, often leapfrogging other markets. Africa also drives innovation through both necessity and opportunity, supported by a strong entrepreneurial culture. In a market like Nigeria, where SMEs provide the majority of jobs, investment in new technologies and innovation will be crucial to sustaining economic growth. That growth, in turn, will generate returns for investors, and I believe this remains underappreciated outside Africa.
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Pinnacle Daily: Nigeria has one of Africa’s biggest fintech ecosystems. What policy or regulatory changes could attract larger blockchain investments into the country?
Downes: Regulatory certainty is a key driver of investor confidence. Nigeria continues to make positive regulatory progress, with the Securities and Exchange Commission (SEC) assuming oversight of all Virtual Asset Service Providers (VASPs) and implementing the Accelerated Regulatory Incubation Programme (ARIP), which is granting operational approvals to both local and international businesses.
These developments, together with the reopening of banking relationships for VASPs and strong compliance actions by the Central Bank of Nigeria, are beginning to provide the certainty investors need. They help create confidence that the businesses they invest in can operate legally, securely and profitably over the medium term.
Pinnacle Daily: Most blockchain funding in Africa is still at the seed stage. What’s needed for startups to secure larger Series A and growth-stage funding?
Downes: One important shift is creating viable exit pathways for investors. In Africa, we see fewer IPOs and large corporate acquisitions than in developed markets, reducing investors’ willingness to commit significant capital to later-stage funding rounds.
It can also be difficult to repatriate investment returns after an exit, making the market less attractive. More investor-friendly policies would help scale venture capital funding across Africa.
Pinnacle Daily: Beyond payments and remittances, which sectors in Africa and Nigeria do you see offering the greatest opportunities for blockchain over the next five years?
Downes: One area I’d particularly highlight is digital identity built on blockchain technology. I hope to see significant progress in this space over the next five years. It could help create immutable and reusable identity records across Africa, making it easier for people to access financial services digitally.
Beyond that, I don’t see any sector that cannot benefit from blockchain technology. Whether it’s agriculture, retail, telecommunications or any other industry, blockchain can improve infrastructure, efficiency and operations across the economy.
Pinnacle Daily: As more African countries implement digital asset regulations, how should Nigeria position itself to become a leading destination for blockchain investment and innovation?
Downes: Continuing to strengthen regulatory clarity is fundamental, alongside maintaining broader economic and currency stability. Nigeria should establish itself as a regional hub for compliant blockchain businesses while aligning its regulations and policies with those of the African Union.
What investors are looking for is a predictable regulatory and policy environment, combined with strong economic conditions. Markets that create this environment will be the biggest beneficiaries of future blockchain investment.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X