By Olwuatobi Ajayi
06 November 2022 | 4:48
Africa is considered the cradle of human civilization. Africa is renowned for its wealth of human and natural resources. Given its extensive cultural past, dynamic climate and dynamic landscapes, Africa could be seen as the ideal land of opportunity. The opportunities on the continent are not limited to its untapped potential. More importantly, there…
Africa is considered the cradle of human civilization. Africa is renowned for its wealth of human and natural resources. Given its extensive cultural past, dynamic climate and dynamic landscapes, Africa could be seen as the ideal land of opportunity. The opportunities on the continent are not limited to its untapped potential. More importantly, there is great untapped potential for technological advancements on the African continent.
Currently, certain challenges prevail in Africa. These challenges can, to a large extent, be solved with existing advanced technologies that are already being adopted in developed countries in Europe and North America. The blockchain is one of these innovations. The technology is based on the basic principles of anonymity, decentralization and immutability. If these three main components are skillfully harnessed, they have the potential to quickly resolve challenges and change industries and sectors across Africa.
Some of the established industries and sectors that this technology can easily transform on the continent include finance, supply chain management, entertainment, real estate, land administration, and healthcare.
In the following paragraphs, we will show how each of these sectors and industries can successfully use blockchain technology to solve some of their common challenges. We’ll also show how blockchain innovations could help these industries stay high, scale, and ultimately live up to their potential.
The financial sector in Africa is largely made up of the activities of traditional banks and fintech (usually labeled as “neo banks”). It is worth mentioning that neo-banks have been the main driver for the adoption of modern banking services. This is because they are simple to use on mobile phones. However, these initiatives have not achieved sufficient results.
According to a report, up to 57% of Africans do not have a bank account or mobile money wallet. In addition, the World Bank also estimates that Africa has around 350 million unbanked people. This represents approximately 17% of the world’s unbanked population. Other statistics from the World Bank revealed that about 58% of Africans live in rural areas.
Blockchain technology could be the ideal solution to create viable and profitable means of financial inclusion for unbanked Africans. For starters, blockchain removes barriers to adoption such as bureaucracy and paperwork. It replaces simple steps like registering mobile number, email address and government ID card for verification. In addition, the blockchain performs transactions faster and is more profitable.
Going further, problems related to cross-border payment settlements are easily solved with it. Cross-border payment service providers in Africa typically charge between 0.5% and 5%. This amount could be significantly reduced on the blockchain. Transactions usually cost around 0.1% of the transaction amount. With almost instantaneous transaction speed, blockchain could be a game-changer in the African financial sector and a handful of up-and-coming projects like Ivorypay are beginning to integrate blockchain payment solutions into daily business life.
Africa’s real estate and land administration sectors also have immense potential for expansion and efficiency. Currently, Africa is one of the continents that is experiencing a rapid rate of urbanization. New land is opening up and more buildings and infrastructure are being constructed to accommodate city dwellers. Yet, it is surprising that land and property documents are still exchanged in paper form. Physical paper documents proving ownership are quite popular among real estate investors and landowners.
Government land administration agencies could also benefit from blockchain. This will help eliminate the continuous stacking and storage of physical files. This will be replaced by cryptographically secure on-chain protocols dedicated to storing land records. The blockchain principle of immutability becomes relevant here. There will be no single point of failure or loss of records on the blockchain. This is a better alternative to physical files, which could be erased in the event of a fire or flood.
It could also prove useful in the field of real estate investment. Blockchain, through non-fungible tokens (NFTs), can now be used to create a digital representation of real estate. This NFT can be easily purchased and resold by owners. A much modified alternative is the concept of fractional ownership. Here, expensive properties can be divided into fractions of their value. Each fraction can then be bought and sold by small investors. This could be a turning point in property investment on the continent. Essentially, investing becomes decentralized and accessible to everyone.
Product authenticity is another problem that blockchain could help solve in Africa. Consumers often find it difficult to certify the legitimacy of a product, despite the fact that there are institutions and organizations that carry out checks and ensure product uniformity. As a result, consumers are faced with the dilemma of authenticity. A blockchain solution to this dilemma is possible and feasible. Businesses and brands can adopt blockchain to leverage NFTs as a means of authenticity. NFTs will create a unique and permanent proof of authenticity on the blockchain. Links to these NFTs can then be embedded into products as barcodes. Users can scan these barcodes to confirm the authenticity of the product.
Healthcare is another sector where blockchain can be used to standardize processes in Africa. Currently, centralized health care databases are largely non-existent. It is common for each health center to have its own registration room where patient medical records are stored in files and stacks. Blockchain could be used to store all of these medical records without fear of loss or damage. At the same time, storing medical records on the blockchain makes them easily accessible to other physicians who may later become involved in treating a patient.
It can also be deployed in the sphere of African entertainment. Piracy issues have plagued the entertainment industry in Africa for decades. Quite often movie stars lament how piracy affects their income and profit margins. This usually comes after spending huge amounts on production. Blockchain could be deployed to prevent such occurrences in the future. Movies and other entertainment intellectual properties can be minted as NFTs on the blockchain. These NFTs are then resold on marketplaces dedicated to consumers. Users who have successfully purchased the NFTs are then granted access to the content. Content will remain digitally encrypted and piracy can be eradicated.
Another way to use NFTs in the entertainment industry in Africa is to issue NFTs as event passes. This support simplifies the ticketing of events and eliminates the long queues that are commonplace in cinemas and public performances.
The education sector in Africa can also benefit from blockchain technology. The sector could adopt blockchain technology as a means of storing student records.
The industry can also use it to issue digital certificates in the form of NFTs. NFTs will serve as a permanent record of these certificates on an immutable network. Second, third-party entities wishing to verify authenticity can simply access the digital certificates. Finally, digital certificates save students from unforeseen events such as fire or loss.
Essentially, this creates an avenue for transparency and simplicity at all levels. It creates a reliable and fraud-proof system. At the same time, its ease of use makes it accessible to everyone, creating a decentralized system that works for everyone.
Technology could serve as a springboard for long-term solutions to some of the chronic challenges that limit Africa’s economic progress, business growth and improved livelihoods.