How Blockchain Technology Can Help Foster Development In Africa

By  |  September 14, 2018

With the arrival of blockchain technology and the advent of cryptocurrency – two concepts whose discovery and development can be credited to a person or group of persons called Satoshi Nakatomo (possibly a pseudonym) – there has been something of a jostling for places on the global tech scene. And the scramble can be thought to be somewhat justified especially when the potentials held by these innovations is put into perspective.

In various circles around the world, a number of organized institutions are sort of tripping over themselves to get in on the act as they think up best possible ways to leverage what the technology has in the offing.

It is much the same narrative on the African continent as there has been something of a proliferation of blockchain-based tech startups who are looking to impact their immediate communities and solve some of the continent’s lingering problems through the development and adoption of this novel technology-driven approach – a valid case in point being South African fintech platform, Wala, who recently bagged USD 100 K for their blockchain-based solution in the 2018 edition of the Zambezi Prize for Innovation in Financial Inclusion. More so, such names as Kenya’s Bitsoko and ChamaPesa, Nigeria’s NairaEX, South Africa’s The Sun Exchange and Bankymoon, Zimbabwe’s Golix and Bitfinance, as well as numerous others, have been making the rounds in media circles lately.

This can be considered just one out of a number of instances in which the technology is being put to use with a view to solving societal problems. In many ways, blockchain technology is threatening to revamp the global financial market, as well as the manner in which we do business on a daily. And these could be thought of as just the more common instances from a myriad of other ways in which the technology can be put to effective use.

Blockchain technology may have been met with skepticism and cynicism from the onset (as is often the case with any system that has its sights trained on changing the long-established, albeit, not necessarily flawless methods of doing things), and even labelled as just another fad that will have a brief reign and create a temporary buzz mostly due to the Fear-Of-Missing-Out (FOMO), and fizzle out just as quickly as it had arrived. But there is very little doubt now that the technology has somewhat held its own in the eyes of enthusiasts and skeptics alike.

On the African scene, there exists a number of ways in which the technology can be leveraged for the provision of useful solutions. These solutions can be thought to hold a lot of importance on the continent as they can serve to better the lives of its people, as well as bring about developments in the economic and social strata. Now, here are some of those ways the technology can help foster development in Africa.

Identity Management

The continent’s struggles with proper identification and citizen data management is well-documented. Since what seems like time immemorial, Africa has had to contend with shortcomings in the area of managing identity and efforts to curb this debilitating problem have mostly turned out a snafu.

The need to manage the identity data of the citizenry might not come across as one to be fussy about at first glance, but it does make for even gloomier reading when you factor in instances in countries like Kenya, Nigeria, Ghana, and a number of others, who have had to contend with problems associated with ghost workers in public sector payrolls; a scenario that has amounted to millions in losses.

While several efforts geared toward purging government payrolls off fictitious names have been anything but successful, this issue can be effectively dealt a coup de grace with blockchain technology.

Since data stored on the blockchain are immutable, unerasable, and unalterable, it will come in handy in the bid to tackle the problem of citizen identity management. The implementation of this novel approach for this purpose should be considered a plausible option by governments as it affords a veritable means of putting a stop to cases of false, multiple and mistaken identities, through the adoption of cryptographic hashing – a feature of blockchain technology.

An identical current use case scenario which can be looked upon as a case in point is US-based blockchain startup, Civic, who are known to leverage Bitcoin’s public blockchain for the purpose of delivering identity management solutions to individuals and businesses. In largely the same manner, African governments can take a cue and get in on the act. The services of such players can be sought to address not only the loopholes in the wage bill but also other issues associated with citizen identification and authentication.

And it does help that a number of African startups are looking to explore that dimension as a recent publication on WeeTracker revealed Bace as one of seven African startups that have been shortlisted to receive USD 100 K each in funding from MEST Africa. Bace is a platform is looking to solve problems associated with identity and KYC (Know-Your-Customer) in Africa through the use of blockchain technology and cutting-edge facial recognition.


Through the use of cryptocurrency or tokenized fiat currency, blockchain technology can be leveraged with a view to getting rid of the current difficulties associated with money transfer systems. Through the provisions of the technology, the issue of delayed transactions which are known to still bedevil such platforms as MoneyGram, SWIFT, Western Union, and a number of others, can be eschewed and consequently eliminated.

Blockchain technology has the edge over its peers on the backs of the sheer speed of financial transactions carried out using the technology, as it boasts the ability to have thousands of dollars transferred from one part of the globe to another within a matter of minutes or even seconds – all other things being equal. And it comes as a plus that blockchain-based money transfers, when juxtaposed with the traditional methods, come at costs that are significantly less.

And if you are still yet to come to terms with how big a deal this is, there are figures to back this up. According to the World Bank, as at 2015, it was estimated that Africans in the diaspora weighed in with up to USD 35.2 Bn in terms of remittances back home. It was also reported that these transfers accrued a whopping 10 percent of the total value of the transfers.

This can be construed to imply that a considerable amount of these remittances ended up in the coffers of third-party service providers in lieu of the intended beneficiaries. With blockchain technology, the need for these third parties can be bypassed and these charges can be avoided. This will translate to lower fees and increased remittances as transactions become largely be peer-to-peer.

The Electoral Process

The African continent is no stranger to post-election squabbles which is often the outcome of disputed election results. There have even been some extreme cases were violence which resulted in the wanton destruction of lives and property was recorded as a result of conflicting election results. But blockchain technology can help put an end to this vicious cycle as it has the ability to serve up full-proof electoral systems that can help maintain the sanctity of the polity and the sanity of societies and communities.

Here is a dose of reality: something unusual happened in the 2016 general elections held in The Gambia, as it was reported that marbles were used by voters to cast their votes. Now, while this process may not necessarily imply gross inefficiency, it can be thought to go against the fundamental tenets of ballot privacy that should basically be the hallmark of an electoral process.

During the election, voters were seen dropping marbles in ballots in containers for their choice aspirants in open view of everyone in the vicinity. This may have scored points for transparency only if the same open approach had been witnessed in counting the “stone ballots”. And that’s not to mention question marks on the accuracy of result collation especially when you factor in human error.

Much like its use case in citizen identification, blockchain technology can come in handy in the electioneering process as it possesses just the right mix of publicity and privacy. The technology will enable voters to cast their votes faster and in an electronic manner, and the accuracy and speed of results collation will be sure to leave no one in doubt.

This automatic process that is beyond any form of any external influence will serve to dispel disputes and restore the confidence of the populace in the electioneering process. A blockchain-supported electioneering system offers a platform that is immune to manipulation, and since the eligibility of voters can be ascertained by way of age and other criteria, results obtained can generally be considered above board.

Transparent Government Expenditure

There is a certain misconception about the use of Bitcoin and other cryptocurrencies which revolves around the idea of transactions involving these elements being enshrouded in some cloud of apparent secrecy. This is a far cry from what is actually the case, as these transactions are actually available on a public ledger that can be accessed and viewed by all and sundry.

With a view to solving problems associated with accountability and embezzlement of funds amongst public office holders, Blockchain technology can be incorporated to bring about absolute transparency in the financial dealings of governments and institutions in Africa.

This move will come as a much-needed respite to a significant fraction of the continent’s demography who are increasingly becoming disenchanted with the system or have lost faith altogether in the government on account of the unchecked misappropriation of public funds. The implementation of blockchain technology can make it possible for taxpayers to keep tabs on government spending. And isn’t that what true transparency and accountability are all about?

The adoption of the technology in public sector finance dealings will serve to curb corruption and embezzlement more effectively than any legislative injunction, as transactions will be followed in real-time. This way, shady transactions can easily be flagged, called up, and x-rayed – which should prove a better fix than waiting to uncover misappropriations from the usual annual audit statements.

This practice of delegating certain operational aspects of governments to the blockchain is becoming commonplace in various parts of the globe and African governments might want to consider hopping on the bandwagon if talks of progressiveness and fairness, with the interests of the citizenry at heart, are to be taken with more than a pinch of salt.

Land Title Registration

The current land tenure system in Africa is something of an impediment to growth and development as it casts a dark cloud over the prospects of many landowners and aspiring landowners on the continent.

Problems associated with legitimate land ownership in Africa can be tackled with blockchain technology as it has the potential to streamline and automate the entire process of land registration, with a view to providing a more reliable system that is devoid of manipulations and fraud.

And it comes as a plus that a number of African enterprises are making significant headway on this front, with a good example existing in the form of Ghana’s Bitland; a company that has designed its business model on the idea of assisting both existing and aspiring landowners, as well as stakeholders, with services which revolve around surveying and recording deeds onto the BitShares blockchain.

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