Blockchain use in social and economic development in Africa


Posted on: January 15, 2018 by Gala Paricheva

Emerging technologies have a vital part to play in improving people’s lives and the economic outlook of countries. Nowhere can this be seen more clearly than in Blockchain use across Africa.

Blockchain’s philosophy is to put control over transactions into the hands of citizens, removing third parties, such as banks and money transfer companies, from the equation. It was borne out of a desire to challenge these institutions after the global financial crisis.

Because of its integrity and reliability it can and should be used by emerging economies to the advantage of citizens.

In fact, there are several solutions that Blockchain technology offers, which are urgently needed by the African continent to better lives and to increase economic and social development.

Here we look at a few examples of where Blockchain is making and can make a huge difference to the region.

Banking

The World Bank has revealed the total money transfers by African diaspora to their region or country of origin surged by 3.4% to $35.2 billion, in 2015, of which 10 percent is an associated transfer cost, which goes to third-party service providers instead of getting to intended beneficiaries. The wider use of Blockchain technologies could dramatically reduce these costs as well as resolving the issue of bottlenecks and delays in the banking and transactions systems. This would bring an enormous monetary benefit to the country as a whole.

Blockchain can also stimulate investment and growth. Traditional banks are extremely risk averse in this region and tend not to lend money to start-ups or entrepreneurs. Blockchain has allowed for crowdfunding of African business for the first time, stimulating growth and development. This also allows a young and ambitious cohort further opportunities to improve their lives and, in turn, the economic outlook of their country.

Issues of state

Blockchain can resolve issues of identification and citizen management. In areas of the African continent where election rigging and fraud have long been an issue it can restore trust in the electoral system and provide governments a secure and efficient way to manage elections.

In late 2016, the FT reported that Africans were committed to the ideal of democracy, despite their history of vote-rigging, coups and hereditary presidents. In a poll of more than 53,000 people in 36 countries, 67 per cent said democracy was “always preferable” to the alternative, according to Afrobarometer.

Blockchain use to secure the electoral system could bring this ideal to reality and greatly improve democracy in the region.

Land title registry

Currently 90% of agricultural land and its attendant ownerships are not registered. This constitutes a huge problem for landlords, farmers or aspiring landowners or investors in Africa.

Blockchain technology could allow for streamlining and automating the entire process of land registration to provide a better system. This is already being piloted in Ghana by a local NGO, Bitland, and has proved to be extremely successful.

Vaccinations

Vaccinations across Africa require a secure distribution supply chain. In many cases fake medicines can enter the system making the vaccine process unsuccessful and potentially harmful. There is also an issue in securing the process to ensure temperature requirements are met in the transfer of medicines.

Blockchain technology can secure the process and offer real-time monitoring of distribution and temperature controls eliminating the issues detailed above by following the entire supply chain.

Future of Blockchain

There are some technical, legal and ethical issues that will need to be overcome and resolved.

Technically, is the Blockchain robust enough to move from experimental to industrial in its ability to manage data? Can it be 100% safe and reliable and how will it conform to emerging privacy legislation such as GDPR?

Legally, when Blockchain is applied, national legal systems, including those of the African States, must first validate the technology, in order to give it probative force. The example above of its use in the Land Registry system requires that it can be used as proof of registration before the Courts.

The primary issue however is one of sovereignty and control. Who controls the Blockchain and how much control do they have? If technology were to replace some trusted third parties, it would be important that it could remain independent. It has been observed that miners (decrypting blockchain computers) are few in number and mostly Chinese or American. The technology is in the hands of a few computer giants so there is an issue around independence.

Taking into account all of the above, Blockchain will have a bright future and, more importantly, offer a bright future to emerging economies that are able and forward-thinking enough to take advantage of its technology. That’s not to say that it doesn’t still require further exploration into its efficiency and effectiveness. It’s still early days. It is right though that the emerging economies start to consider this technology and begin testing its use to improve lives.

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About Gala Paricheva

Lawyer of the Paris Bar and a partner and founder of Oolith 
Gala PARICHEVA is a lawyer at the Paris Bar and a partner and founder of the international business law firm Oolith (www.oolith.eu) based in Paris. Gala practices Intellectual Property Law: Computer and Internet law, Trademarks and designs law, Patent and Copyright, Big Data and Personal Data Law.    Gala Paricheva is also specialized in infringement and unfair competition litigation. She works with start-ups, small and medium-sized companies, large companies, business consultants and business advisors (accountants, communication and marketing agencies, chambers of commerce, incubators, etc.) During her 10 years of professional experience, she has actively assisted companies in securing their intellectual property rights and assets both nationally and internationally. Gala Paricheva is a member of the International Trademark Association (INTA) and the Association of Patent and Trademark Law Practitioner (APRAM). She is also a partner and co-founder of the legal network www.le-droit-des-affaires.com. Former Vice-President of the Association Au Secours Haiti 2010!