Crypto is Perfect for Africa
The main beneficiary of blockchain will eventually be the public sector which is a host of activities for the majority of citizens of every country. Blockchain can be used to automate and accelerate services and simultaneously lower their costs, eliminate multiple layers of redundancy and existing intermediaries and their accompanying costs and delays when providing services to citizens, it can reduce burdens and ease regulatory compliance, introduce record-keeping efficiency in areas such taxation, and smooth government operations across a number of areas.
This can be achieved considering the three main characteristics of blockchain: being a decentralized or distributed network of ledgers where ledgers are replicated across parties with each keeping full transaction records; its ability to create irreversible and immutable records; and the fact that it can perform transactions in real time and securely.
While the introduction of electronic databases has significantly improved efficiency and cost of information management in comparison to file folders and filing cabinets, it took internet to unlock greater value by making data and information more accessible and transparent. The extent to which blockchain can be used to enhance collaboration among government organizations is clear:
Already, blockchain, for its benefits alongside other regulatory and management checks, is being trialed in a number of places and areas to enhance what is known as e-government, for instance by Estonia in areas such as identity management, healthcare, voting; in United Arab Emirates in areas such as business registration, trade, and banking; in United States in areas such as corporate registry system and share issuance, General Services Administration, the Department of Homeland Security, and the Health and Human Services Department.
However, blockchain is being explored in many areas in the public and business sectors.
Here is an overview of a number of blockchain use cases highlighted
- Identity Management and citizen registries
About one-fifth of the world’s population lives without a legal or officially recognized identity and the problem is worse in Africa where majority of young people do not have identity cards. Being much more than a mere electronic registry or identity, a secure, self-sovereign digital identity on blockchain can enable efficient transactions across a wide variety of asset classes.
Here are some examples of how blockchain is being applied in identity management. For instance, a single blockchain-based identity can be used in multiple applications without need to create another one -- cashing a cheques, loging into accounts online, opening bank accounts, purchasing products on credit, for security checks at airports, for custom checks at borders, opening brokerage accounts, retrieving car from a valet, picking up mails from post offices, entering government or corporate facilities. Blockchain can secure such an identity and avoid illegal duplication etc.
- Maintaining of public records
Blockchain adds more than just authenticity to public records. It adds permanent proof that the record has been created and all record transactions are recorded immutably. In every continent, blockchain is being explored in land registration application except Antarctica. Blockchain can be used to facilitate or compliment land registries such as in the registration or transfer of a land deed or title. The transactions are recorded on the ledger and provide certainty, immutability and uniformity of access for all stakeholders.
Blockchain helps unify property records and easing their management and their use in related planning and decision making.
Apart from land registration, it can be employed in maintaining and unifying other personal records such as marriage, divorce, death, passport, visa, deeds, property titles, vehicle titles, vehicle registration and corporate registration. It may help eliminate falsifying/faking of information such as passports, stealing and illegal access to this information, etc.
For instance, illegal immigration is a problem in areas such as U.S. as a result of fake green cards, fake IDs, fake marriage certificates, fake passports and other problems such as fake driver licenses, fake death certificates, fake m title deeds, fake car licenses, etc are still common in many parts of the world and complicates security.
- Voting systems
Manual systems sees you waiting for hours before voting and there are so much things to worry about legacy electronic voting systems. Blockchain has/is being piloted in New York- U.S.A, Texas, Switzerland, Denmark, Estonia, Ukraine, and South Korea. It can be used not only for voter registration but also for casting a vote as a transaction. Blockchain makes it quicker and easier to validate cast votes, securing these votes as immutable and unalterable records, supporting anonymous voting, eliminating double voting and lowering the cost of manual systems and inefficient electronic voting systems such as high costs of ballot printing and electronic voting machines.
Blockchain can help to solve problems such as cyber attacks and compromising of results in centralized database-based electronic voting systems, lack of transparency in electronic voting systems, and voting delays as experienced in most parts of Africa.
At the end of the day, it could improve trust in governments and reduce conflicts related to electioneering and voting as a result of record discrepancies and failure of voting systems. Blockchain-based voting systems can be trialed at first in special cases such as enabling overseas military personnel to vote in public elections.
- Port logistics, international logistics and national supply chains
In using blockchain for port logistics, records can be automated on blockchain to be shared by government operations, custom agencies, shipping lines, shippers, consignees, brokers, and booking agents to help improve transparency and eliminate delays in moving through customs and identifying shippers, inspection, and compliance. It can help eliminate theft, miscounts, errors and fraud.
Same is when applied in transportation and supply chains.
- Personal and public financial systems, credit systems, and banking systems
The role of blockchain in financial sector will only increase in the future, with the technology expected to save $15–20 billion annually in the financial services industry by 2022. The one sector that would benefit greatly from application of blockchain is banking. It can be applied in a number of ways such as establishing decentralized ledgers for payment, introduce distributed clearance and settlement systems that register low costs, establish blockchain-based crowdfunding through ICOs, help with tokenization of securities such as stocks and bonds and alternative assets, remove gate-keeping in loan and credit industries, and revolutionize trade finance.
Blockchain is also being utilized in developing applications that are easy to on-board clients such as those that do not need KYCs or long on-boarding procedures, and thus helping the underbanked and unbanked in any parts of the world. Many blockchain applications allow anyone to "bank" and transact with ideally no checks and long on-boarding procedures.
World Bank shows that the world's unbanked population has dropped to 1.7 billion in 2017 from two billion people in 2014. Most of these people are located in the developing worlds, including countries in Africa. Blockchain is turning out to be an important platform for African startups, with Africa’s over 300 fintech startups being based on blockchain.
In addition to simple client on-boarding alongside ease of use and access, another application for blockchain is loan applications based on the blockchain, which, like some loan products not based on blockchain, do not require (long) credit checks. In fact, crypto assets on blockchain are utilized to act as collateral for loans for many people.
In Africa, mobile money market is increasing and related to banking statistics because out of the 12% of adults in sub-Sahara who have a mobile money account half do not have a bank account and use mobile phones to receive money.
- Intergovernmental transactions and related reporting
IGT is an important application for blockchain because all agencies of government are expected to work with each other for efficient management in all areas. This includes transactions in areas such as budget preparations, and payrolls.
- Other government activities
These include voting, taxation, procurement, health care, schooling, libraries, fire services, army, police, marines, electricity, postage services, water, garbage, sewage management, and many others): The benefits of employing blockchain for provision of e-government services are vast: automation reduces costs and unifies records, improves efficiency, enhances information sharing for decision-making, and reduces errors (fraud, discrepancies, etc).
For instance, a blockchain-based digital e-residency program for Estonia helps anyone to become an e-resident of the country in 30-60 minutes for a cost of 100 Euros and they can create a digital identity, establish a business, setup banking relationships, and execute business documents. Citizens are now able to pay taxes on blockchain.
- National cryptocurrencies
To what extent a country can solve its currency problems, banking problems, inflation problems and other problems using a digital currency or a cryptocurrency may be debatable, but some countries are leading the way: In addition to Venezuela, Iran and others, Estonia is also planning to launch its own digital currency called Estcoin.
Why Africa And Blockchain?
Digital revolution and e-governance is yet to hit Africa in the way it has the rest parts of the world. Only 6 countries, namely Ghana, Mauritius, Morocco, the Seychelles, South Africa and Tunisia are in the list of the the group of states with a high level of e-knowhow. While half of the African states have some form of electronic ID card, most of the services are still not unified in their planned e-governance systems.
There is some progress in ICT policy and planning, and successful use cases of provision of e-services in Africa especially in the mobile money sectors, but the levels still remain low. There are some progress in e-tax systems, e-citizen registration, and other areas, but most of these are versions of electronic record management systems.
Coupled with opportunities for growth of mobile solutions, Africa is also poised to welcome more fintech innovations. African fintech startups raised over $92 million in funding between the beginning of 2015 and the end of May 2017. Payment and remittance startups constitute the majority of fintech startups in Africa. The good thing about blockchain startups is that they were found, in a report, to be the most successful in terms of accessing finance with 39 percent being able to secure financing. Hence, blockchain unlocks capital for fintech in Africa.
Fintech innovation in Africa is expected to rise to valued at $3 billion by 2020 according to PwC survey in 2017. Nigeria and South Africa will garner a major portion of these investments.
Africa's business and private sector, verses blockchain
Africa business private sector is also already benefiting from blockchain implementation. Middle East and Africa spending on blockchain will more than double to $80.8 million by the end of 2018 from a year earlier, according to US-based International Data Corporation (IDC).
Paolo Tasca and Geoffrey Goodell who are executive director and deputy director University College London’s Centre for Blockchain Technologies say blockchain can empower local cooperatives and businesses in the continent to develop trust relationships on their own terms which would have significant impacts on local economies and human rights. There is immense opportunities for blockchain and crypto startups in any of the areas discussed.
Below are some of examples of how it is being applied in businesses in the private sector.
First of all, integration of blockchain in business is very low with a handful of companies based in the region to help with integration. An example is Bankymoon is South Africa's blockchain integration solution for businesses and private undertakings. It provides technical expertise, insights, consultation, analysis and development of solutions.
Examples of blockchain businesses in the area of mobile or payments include BitPesa, which started in Kenya in 2013 and launched in Tanzania in 2014 and Uganda and Nigeria in 2015, allows individuals to send money in Bitcoins and the company converts to physical currency at collection point. It serves Tanzania, Uganda, Nigeria, DRC, Senegal, Ghana, & Morocco. BitPesa has partnered with 6+ of Africa's most popular mobile money networks and more than 60 of Africa's premier banks to reach more customers.
It has since acquired TransferZero, a leading European Payments company and launched in Ghana last year. BitPesa has a cross-border payments solution for B2B applications known as BFX and a digital to fiat exchange for frontier markets known as Pesi. Pesi allows anyone to buy and sell Bitcoin instantly with fiat and via via bank, debit card, mobile money or blockchain wallet address.
Golix -- formerly BitFinance -- is a popular cryptocurrency exchange in Africa based in Zimbabwe but with operations in other countries of the region. The exchange supports buying and exchanging of Bitcoin, Eth, GLX, Steem, Dash, and other cryptocurrencies against crypto and fiat.
Another example in the area of money transfers/remittance is Centbee, a South Africa-based cryptocurrency payments and remittance company. It allows sending and receiving of Bitcoins, conversion of BTC to BSV. Their remittance model uses Bitcoin as the ‘rails’ to make cross-border payments to support family as easily and cheaply as possible. Their wallets makes it easy for merchant retailers to accept Bitcoin payments on Android or Apple smartphone or tablet.
Bitland is also a popular Ghanian blockchain solution, which is already providing land registry services on Bitshares blockchain and citizens can register property ownership on the blockchain. It is helping solve corruption related to land registration.
And in the Agriculture sector, Nigeria's Agrikore blockchain-based smart-contracting and payments and marketplace platform, which is powered by Cellulant, allows every stakeholder in the agriculture value chain to do business in a trusted and transparent environment. It hosts and brings together Farmers, Agro-dealers, input producers, produce off-takers, bankers, insurance companies, governments, commodity exchanges, warehouse receipt operators, logistic companies to do business together more transparently on blockchain. It provides agric-crypto exchange. It also has supply management tools and financing tools. It can be applied by private and public sector as well.
Can blockchain help solve Africa's most pressing problems?
Corruption and mismanagement of resources verses blockchain
Africa is world's most corrupt continent according to the Council on Foreign Relations and this derails development by costing the continent more than half of the resources that could be used to finance education for the entire continent every year -- which is around $30bn to $60bn every year according to UNDP although earlier estimates put it at $150b. Six of the ten world's most corrupt come from sub-Saharan Africa. Total global cost of corruption is $2.6 trillion USD equivalent to an entire annual nominal GDP of the United Kingdom. Countries such as Kenya lose nearly a third of its budget to corruption every year.
The cost of corruption far exceed what Africa receives as total aid from developed world. Together with embezzlement, resource mismanagement, and fraud, corruption constitutes one of the Africa's worst development disease. The digitization of bureaucratic processes in the public sector is seen as a possible means to curb corruption by establishing transparency, efficiency and the rule of law while the blockchain-ization of these processes could root out corruption because it can "fundamentally shift the way in which the society operates."
Carlos Santiso from the Stanford Social Innovation Review writes that blockchain addresses corruption given that it eliminates opportunities for falsification of data and information and risks of having a single point of failure (middlemen) in managing data; helps to track data; ensures transparency and integrity of records and transactions on blockchain; secures information by encrypting it and sharing it on distributed databases; overcomes data silos in traditional bureaucracies in which public entities are reluctant to share information among themselves; and addresses lack of privacy and data privacy issues.
Elsewhere, BitFury, a blockchain company, is partnering with U.S.'s National Democratic Institute Blockchain to encourage collaboration with the government, private institutions, technologists and investors in the application of blockchain for social good and governance through the Trust Accelerator Initiative.
Blockchain, with its immutable and transparent nature of ledgers and efficiency of doing transactions, can be employed to improve accounting, reconciliation of transactions, and to make informational systems more effective. It can also be employed in effective systems monitoring, elimination of duplicate and fake records that make possible corruption, and in the making of supply chains more effective and less costly. It could also be used in the improving of public financial records and corporate registries, enhancing transparency, and removing of costly middlemen networks or at least making them reasonably cost effective. As discussed, it can be employed to harness data and thus facilitate better policy making, planning and implementation in any sector, whether private or public.
A good example in this area is the Ardor blockchain which can be applied to help reduce corruption by focusing on the Internal Generated Revenue section and using of decentralized currencies backed by the security of an existing blockchain.
"Corruption, embezzlement, fraud, these are all characteristics which exist everywhere. It is regrettably the way human nature functions, whether we like it or not. What successful economies do is keep it to a minimum. No one has ever eliminated any of that stuff." -Alan Greenspan, former Chairman of the Federal Reserve of the United States.
Not only is mismanagement and abuse of Africa's resources including natural resources a huge problem that derails development, it compromises on sustainability of these resources. Poor utilization of resources has, for instance, led to importing of $40 billion worth of food every year by African governments to the continent in a continent that sits on lots of untapped agricultural land, and whose most countries at one time depended on agriculture as their economic backbone and in a continent that was once a net exporter of food. Mismanagement also hits other sectors such as hydrocarbons, oils, and other natural resources.
Blockchain is today being applied in the management of resources whether you are talking about its application in IoT to collect relevant data that could facilitate more efficient resource management, peer-to-peer energy exchange , working alongside other technologies in the reducing of energy consumption by way of tracking usage and use of smart devices, facilitating the recording and sharing this information at minimal costs, solar and other forms of energy management and distribution, resource tracking, supply chain management, peer-to-peer transactions, dynamic pricing and optimal demand- supply balancing.
Health Care and blockchain
While most of the health care systems currently focus on traditional and visible factors such as Malaria and HIV, change in lifestyles and a growing middle class are making noncommunicable diseases like cardiovascular disease, cancer, and diabetes big issues among populations.
On 14 September last year, more than 20 health leaders from across Africa including policy makers, academics, clinicians and entrepreneurs, launched the The Path to Longer and Healthier Lives for all Africans by 2030 report during the Health Research Centre (APHRC) in Nairobi. It points a number of issues that need to be addressed for a healthier Africa population in 2030. Currently, most of eHealth intervention in the region comprise of mHealth, social media-based interventions, tele-health and e-Learning.
Last year, during the State of Digital Health in Africa hosted during the Transform Africa Summit 2018 held in Kigali, a Tunisian cyber security expert who heads the north African country's Innovation Centre told The New Times blockchain technology "will revolutionize digital health care in " given its impact on value chains and through eHealth since digital health is generally a value chain.
Creation of people-centered health systems and promoting regional cooperation are among the nine key messages. Using better healthcare systems driven by technology, data can be harnessed to improve decision-making. Systems can be utilized to combat counterfeit pharmaceuticals, improve health record keeping, track disease stats, improve doctor-doctor coordination and patient outcomes, improve delivery of services remotely, improve participation of public in health activities or good health habits.
Blockchain can help unify critical patient data and information while improving privacy of records. It helps create a single common distributed database for health care data and information. It can help to facilitate sharing of such information, which aids decision-making and interventions, reduces errors and mismatches in public health data and misinformation, improves diagnosis and speeds up interventions where data sharing may be needful to do so.
Blockchain can also work with other technologies such as AI to facilitate access of health data and information to patients in order to help them make better and informed health choices, can help to bring control-ability and share-ability of data and information to patients, and can see the public/patients earning from their data when it is used in research and in designing health solutions. By ensuring immutable records, blockchain can help to reduce cost of maintenance of public health data records, help track health supplies in supply chains and thus reduce drug counterfeiting problems, improve transparency of health records, reduce time for clinical trials, and eliminate redundancies and bureaucracies as well as middle-men related costs in healthcare systems.
An example of innovations in the sector is CareAI, an AI platform based on blockchain technology, which uses “an anonymous distributed healthcare architecture" to facilitate diagnosing of people with diseases such as malaria, tuberculosis, etc. Diagnosis is done by a person visiting an installed machine, using a prick to get a blood sample, puts the sample on a lab-on-a-chip and puts it on a machine.
The scan tells within seconds if a person is infected, whether they should seek medical assistance or offers them a prescription to visit a pharmacy. It's an example of how technology could help healthcare. CareAI is a company based in Europe with machines installed across Europe, but also operates some use in African. Other examples can be found on this list of how blockchain can work with other technologies to aid healthcare.
Finally, lack of employment for population is still the continent's major concerns. Blockchain and cryptocurrency undertakings can help create hundreds of thousands of job opportunities in the continent.