While this is absolutely appalling from our standpoint, other countries dont play by the same rules. Nigeria has a lot of poverty and while i've no idea what the cost of living is over there, i bet $3k goes a lot further there, than in the US.
So while that IS exploitative, it should be better and i dont condone it at all, its perhaps the first step in a road to a better tech industry. Sometimes an industry doesnt just start at the end goal, it has to have a few shitty iterations before things improve.
Perhaps the next competition will be fairer after learning some lessons by running this one?