Blockchain. A buzzword overshadowed by the cryptocurrency craze but no less relevant than the very technology it empowered. There is no doubt that the world is changing at an unimaginable rate on account of the flood of technological developments in recent times. One great difficulty for lawyers, doctors, bankers, and other members of societies around the world in this emerging era of blockchain will lie in the multitude of use cases of blockchain to choose from. This difficulty, however, may indeed be a strength for African economies, often deemed by media as the subject of various plights requiring rectification.
The potential of blockchain to revolutionize African economies cannot be understated. Billions of lives will be touched by blockchain. Africa’s growing economies could leapfrog to become top 20 economies in the world on account of the benefits of blockchain that Africa gains. This is the vision of a hopeful few.
The essence of blockchain is to facilitate a decentralised network that is distributed. This network allows for business transactions to be made with enhanced transparency, security, and predictability. These are the very factors that have proved to be great impediments to the ease of doing business in Africa.
Costs of Fraud Without Blockchain Technology
Fraud costs the global economy billions a year. Africa lost $850bn between 1970 and 2008, a staggering amount which could have been used to make a generation of doctors, lawyers, teachers, engineers, and other builders of the continent. These reported losses present but a small picture of the devastating effects of corruption and fraud on Africa.
Blockchain provides a light to the continent. It presents a new hope of prosperity unmarred by the vices of a few bad apples. Africa is ready for a new era of growth. Africa’s economic lions have proved time and time again that they will rise above the chains of their colonial past, with growth domestic product projections outpacing those of developed economies and stock exchanges posting world-leading performances. The question is not whether Africa will rise. The question is whether it will keep rising. Blockchain may answer this question. Blockchain will answer this question.
African start-ups are utilizing the technology behind blockchain to reduce land ownership fraud. As a lot of land records in many African nations date back to colonial times, it is often very difficult to trace the ownership of land, especially where the ownership of land has been held communally. Start-ups in Kenya and Ghana have proposed solutions to land ownership fraud that results from the ubiquity of land rights in the continent. By registering titles to land on a blockchain that is decentralized and immutable, it becomes significantly harder for government officials and individuals to collude to create parallel titles to land they want to acquire illegally.
This use of blockchain is but a tip of the iceberg. Blockchain could permeate every corner of Africa’s economy. The birth of blockchain in Africa will be the death of corruption on the continent as we once knew. Trust remains an underrated aspect of an economy. Trust in business transactions can unfold a plethora of possibilities for a business community.
In the words of Tole, head of Land Layby Group, “With blockchain, you don’t really need to trust the other party,” The system itself is trust. The blockchain, albeit in its infancy (in terms of application) could make contracts across the African region easier to enforce. The law, although the pillar of society’s values and functionality, has at many times been circumvented due to the subjective nature of human judgement, whether in contravention to the social contract or to commercial contracts. Smart Contracts, a product of the blockchain are essentially code executed according to agreements between parties on a blockchain. An agreement made between a financial institution and an individual, for example, could be “codified”, making the automatic payment of a loan and interest possible by adding all the requisite bank accounts/fund resources of the individual to the blockchain, thus mitigating the risk of delayed payments from the individual. Further, the automatic sale of the individual’s assets may possible if somehow, he fails to pay back a loan.
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