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5 Ways Blockchain Technology Can Help Africa’s Development

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blockchain technology can help Africa

Blockchain technology has garnered substantial global media attention since the beginning of this year. This trend can also be witnessed in the African media landscape who has covered this new technology intensively. In as much as the blockchain may not be the much-awaited savior in all aspects of human life (contrary to what some ‘over-zealots’ preach), there are several features and functions inherent with the technology that can go a long way to better the lives and societal systems of mankind.

In fact, there are several solutions that blockchain technology has to offer, which is desperately needed by the African continent to better the lives of its citizens and to increase the economic and social development of African nations.

Remittances

Blockchain technology through the use of cryptocurrencies or tokenized fiat currency can help reduce and even possibly eliminate the bottlenecks that pertain to traditional money transfer systems. The issue of delayed transactions with platforms such as SWIFT, Western Union, Money Gram and some mobile payment systems can be solved using blockchain technology as it is able to provide higher transaction speed than its peers. With blockchain, thousands of dollars can be sent from one point of the globe to another within minutes or even seconds. Additionally, the costs of these blockchain-based money transfers tend to be significantly lower than traditional systems.

By the end of 2015, it was estimated that yearly remittances of Africans in the diaspora back to the continent stood at a figure of $35.2 billion. The associated cost of these transfers, however, made up about 10 percent of the amount. This meant that a significant amount of those monies ended up with third-party service providers instead of getting to intended beneficiaries. Blockchain-based money transfers should have significantly lower fees and are peer-to-peer, which means that third-party institutions that rake out a significant chunk of the remittance can be eliminated since money can be sent directly from the

Blockchain-based money transfers should have significantly lower fees and are peer-to-peer, which means that third-party institutions that rake out a significant chunk of the remittance can be eliminated since money can be sent directly from the diasporan to his or her beneficiary.

Identity Management

The problem of proper identification and citizen data management seems to be a general debacle with most countries on the continent. Countries like Ghana and Nigeria embark on a regular vicious cycle of public sector payroll purging all in “efforts” to weed out “ghost names”. This issue can be effectively addressed if blockchain technology were to be applied.

Blockchain technology can neither be altered, manipulated nor can its data be erased as such its implementation in solving the issue of citizen identity in Africa seems like a very plausible option that should be considered by governments. By making use of cryptographic hashing and blockchain technology, individual citizens can be identified by a set of codes that will be almost impossible to hack due to the decentralised nature of the technology.

For example, US-based blockchain startup Civic leverage Bitcoin’s public blockchain to deliver identity management solutions for business and individuals. African governments can leverage the services of such players to not only solve their pestering public wage bill discrepancies, but it can be escalated to help address issues of citizen authentication and identification.

The Electoral Process

On a continent where election results and outcomes are often disputed, it is increasingly becoming important to have full-proof electoral systems to help keep the sanity of societies and communities. There have been several instances where disputed election results have led to violent agitations causing loss of lives and properties.

In the last elections that happened in The Gambia, for example, it was observed that voters made use of stones to cast their ballots, a process of this nature may not only be rife with inefficiencies, but it also goes against the ethic of privacy that should generally characterise an electoral process. Voters were expected to drop their stone ballots in containers for aspiring candidates much to the visibility of other voters and officials.

Blockchain’s public and transparent nature can be applied to electioneering just as with the case of citizen identification. Voters will be able to electronically cast their votes faster and results could be collated almost immediately with little or no disputes since the platform is practically immune to manipulation and data on it can be generally regarded as valid because the eligibility of citizens by way of age and other criteria can be assured.

Land Title Registration

The case of land and its attendant ownership issues is an albatross around the necks of most landlords and aspiring land owners in Africa. Blockchain technology comes in handy to help address this challenge and in fact, some African companies like Bitland are already contributing their quota in this regard.

With the power of blockchain technology, Bitland aims to streamline and automate the entire process of land registration to provide a better system of records immune to human manipulations and shenanigans. Bitland helps existing and aspiring land owners as well as other stakeholders with the services of surveying and recording of deeds onto Bitshares blockchain.

Transparent Government Expenditure

Going against the grain of what is popular in the news about crypto-transactions being shrouded in secrecy, more often than not the opposite is the case. Bitcoin transactions are actually available on a public ledger and can be viewed by all. This presents an opportunity for unrivaled transparency and can be translated into the system of governance in Africa.

Being a continent that is plagued with government officials allegedly misappropriating public funds, it would be a milestone for African nations (as well as Western nations for that matter) to introduce blockchain technology into track government spending.

The introduction of blockchain technology into governance would help the ordinary citizen track government spending and know what their taxes are being used for. The blockchain would be able to fight public sector corruption way more effectively than any legislative instrument enacted by parliaments would. Government spending could be followed in real-time and past transactions could be quickly called-up without the need to wait for annual audit statements before resource misappropriations can be uncovered.

Governments across the globe are increasingly off-loading aspects of their operations onto the blockchain and it is only fair and progressive that African governments follow suit for the ultimate benefit of their citizens and posterity.

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FORUS Unveils Blockchain-based Digital Asset Exchange

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FORUS

On December 6, 2017, FORUS launched their Global Digital Exchange in an event held at the Rand Club in Johannesburg, South Africa.

FORUS’ brainchild, the Global Digital Exchange, is a universal utility blockchain and ecosystem solution that seeks to give a single, trusted, universal, user-authentication platform for both the banked and unbanked regardless whether they are making transactions on the web or on mobile.

FORUS, which stands for Free, Open, Real-time, Ubiquitous and Secure, aims to bring financial inclusion to the needy and minority communities in South Africa by providing them with a solution that has been designed to ease poverty, create a productive economy and sustainable return for investors while at the same time creating sustainable wealth yields for the communities utilising the platform.

Designed by engineers from South Africa, FORUS is expected to launch globally in March 2018 in South Africa, the Caribbean, and the USA.

FORUS founder, Sonny Fisher, while speaking at the event, stated:

“This could fundamentally change how we do business in South Africa, Africa and the entire world. We are looking to create a sustainable marketplace within an ecosystem that includes everyone into the digital economy.”

FORUS Financial Inclusion Plan

FORUS’ aims to make it possible for those previously left out from the orthodox financial system to be part and parcel of it by facilitating access to a host of financial services such as banking and savings among others for millions of people.

The payment service will be made accessible to all merchants, corporate enterprises, banks, application developers and financial institutions. In addition, the free payment gateway designed with an integrated advertising platform will be usable by anyone.

The inclusive solution will have:

  • A free e-wallet utility for real-time small payments that can be done anywhere at anytime
  • An e-commerce utility for hawkers/informal shops/small enterprises using any device
  • The ability to pay and receive money for free from anyone, anytime, anywhere
  • Shares for the first 200,000,000 FORUS Foundation Members in an internationally listed company
  • Access to funding, low-interest loans, financing for business expenditure as well as capital
  • Community/collective related clubs that can raise collateral for extensive funding projects
  • All investment fully underwritten and insured

According to Fisher, ubiquity is one of the main obstacles facing such platforms. By making use of leaders in the banking space, key partners and other large member organisations in South Africa and beyond, FORUS aims to sign up more than 100 million members to curb the issue of ubiquity. Member sign-ups will start on 16 December 2017.

The FORUS community includes both international and local organisations such as: Ecentric Payment Systems, Solutions AE, Community Investment Base, the National Apex Co-operative of South Africa (NACSA), Laphum’ilanga Transport Services, National Association of Co-operative Financial Institutions of South Africa (NACFISA), IPM – Integrated People Management, Raiffeisen Confederation and DGRV- German Co-operative.

Functionality of the FORUS Platform

The FORUS platform, with its core design built on distributed ledger technology, will generate revenue through its advertising, discounts on buying groups and loyalty to cater for the whole ecosystem. FORUS’ business model, therefore, allows for real-time revenue returns for the communities involved.

The FORUS platform will use Mahala Digital Media and MahalaTV – a content management and distribution network –  to generate revenue through authorised advertising while utilising the more than 100 million FORUS members as one targeted potential avenue through the AI-driven advertising and content.

The Mahala Digital Media and MahalaTV platforms will make use of FORUS’ secure quick response code (SQR) to allow every magazine, video, webpage, social media platform, newspaper ad, a point of sale or billboard to act as a retail point of purchase. Anyone owning a FORUS wallet can quickly photograph or scan the code and immediately purchase whatever is on sale with no transaction costs being incurred by both the customer and merchant.

Due to its sustainable functionality and versatile nature, the FORUS solution is already gaining acceptance by a diverse set of key partners globally.

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The Nigeria Blockchain Alliance Conference Shows Nigeria is Open to Cryptocurrencies

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Nigeria Blockchain Alliance Conference

The Nigeria Blockchain Alliance Conference 2017 – organised by the Cryptographic Development Initiative in Nigeria (CDIN) – was held on the 23rd and 24th of November in Lagos. The conference brought together blockchain entrepreneurs, policymakers, and cryptocurrency enthusiasts to discuss how blockchain technology and decentralised digital currencies can be leveraged to boost the economy in Nigeria and Africa as a whole.

The Deputy Governor for Economy Policy of the Central Bank of Nigeria (CBN), Dr. Joseph Nnanna, gave the opening speech. He stated that the theme ‘National Development in the Era of Distributed Technology & Digital Currency’ offers a unique opportunity to reflect on the impact of financial technologies and digital currencies on financial system stability and economic development.

He also expressed confidence in how the distributed ledger technology can help Nigeria improve payments, system efficiency, and help eliminate incidences such as counterfeit currencies.

Nnanna, however, also stressed the need for an appropriate regulatory framework as the government is mindful of the potential challenges such technology could pose.

“Distributed ledger and digital currencies can lead to boom-bust in the domestic assets market. Cyber crimes and other security breaches in payment system platform can be amplified if we’re ill-prepared in developing an appropriate framework for seamless utilisation of the technology,” he said.

Also speaking at the event was the CBN Director for Banking and Payments, Dr. Dipo Fatokun who stated that the Central Bank of Nigeria is excited about the opportunities and prospects that comes with blockchain technology, especially for financial inclusion.

“The CBN is currently holding broad industry consultations on distributed ledger technology and cryptocurrency use cases and regulation, innovators forums hold regularly and it is planning to implement a Regulatory Sandbox regime,” Fatokun said.

Another Speaker from the CBN was the Chief Information Security Officer Dr. Rakiya Mohammed who is part of the committee set aside by the central bank for distributed Ledger technology (DLT) and digital currencies. She also reiterated that the CBN recognises what is happening and stated that announcements will be made early next year in regards to digital currency regulation.

“We’re about to receive an approval of the framework for regulating the top players in the bitcoin ecosystem in Nigeria,” she stated.

Nigeria Blockchain Alliance Conference

Image by CDIN

The two-day event attracted over two hundred attendees from different backgrounds which included experts from Microsoft, Stellar, and blockchain startups.

One of the interesting topics discussed was the high growing interest the Nigeria’s bitcoin ecosystem is witnessing. According to the research carried out by Lucky Uwakwe, co-founder of Blockchain Solutions Limited, Nigerian trade around 10 billion nairas worth of cryptocurrency each month.

Paxful CTO, Artur Schaback, stated that 35% of their traffic comes from Nigeria which amounts to one-third of the Paxful’s peer-to-peer exchange community.

Furthermore, Earnest Mbenkum, founder of Fintech Ltd based in Cameroon, expressed optimism saying that 2018 will be the year that Africa puts itself on the map in terms of blockchain technology and innovation, which will offer African economies a golden opportunity to catch up with top economies.

“The difference between then and now is that this is the first time that a revolutionary technology and invention is no longer limited to Western countries. Blockchain technology is available to anyone all over the world at the same time including the African continent,” he stated.

The conference was brought to an end by closing remarks of the founder of CDIN, Fadele Adeolu, who said that he is astonished at how fast the blockchain ecosystem has grown in Nigeria to become what it is today.

“I must confess that the activities in this space today are far beyond my imagination. As a cryptographer, I could not imagine that terms like public and private keys could become a discussion of the general public in 2017. The reason being that even IT professionals don’t usually find those terms friendly. Believe me or not, crypto trading and investment did the magic.”

The Nigeria Blockchain Alliance conference showed that Nigerian policymakers are open to new innovation from the blockchain and cryptocurrency space, which, of course, bodes well for the local crypto community and its startup scene.

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Blockchain Technology Discussed at UN Conference in Ethiopia

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blockchain in ethiopia

Blockchain technology was a key topic of discussion at the UN conference held in Addis Ababa, Ethiopia from the 21st to the 24th of November. The just-concluded four-day conference saw experts discuss the use of blockchain technology in Africa.

The conference was held to review a new Economic Commission for Africa (ECA) with the main aim of the report being to explore the opportunities that the blockchain technology presented to the African continent.

Blockchain technology is an innovative open-source distributed ledger technology that records, stores and transfers data across a distributed network of computers. It was initially invented for the digital currency, bitcoin, but experts have over the years found other applications for the blockchain.

Issues Affecting Adoption of Blockchain Technology In Africa

Speaking to an Expert Group Meeting (EGM) on Information and Communication Technologies (ICTs) on the theme “Exploring opportunities for Blockchain technology in Africa”, Chief of the New Technologies and Innovation Section (NTIS) in the ECA’s Special Initiatives Division (SID), Kasirim Nwuke, stated that there was a lot of publicity around the blockchain technology even though little is known about it.

“Like every new technology, blockchain faces many barriers which must be understood and overcome in order for Africa to take full advantage of it,” he stated.

Mr. Nwuke went on to say Africa lacks sizeable infrastructure, developed financial institutions, strong political stability and lots of capital that can facilitate instant adoption and distribution of technologies. He added that technical constraints were a hindrance to the prevalent adoption of the blockchain technology in Africa.

Such constraints included scalability and speed of transaction of the distributed ledger systems, compatibility of various ledgers, the flexibility of the system against possible cyber attacks and network security, cultural barriers as well as regulatory frameworks.

Incorporation of Blockchain Technology

“It is with the above in view that we commissioned the report which we are presenting to you today, as experts in the field, to review and advice. Our aim in the report is to explore the opportunities and challenges that blockchain technology presents in the context of skills and resource limitations as is the case in most African countries,” added Mr. Nwuke.

“We hope that this report will contribute to ongoing efforts on our continent to understand blockchain technologies, to harness it and to fashion adequate responses to it. We hope that the report will help governments and firms to begin to identify where to begin to build blockchain capacities or capabilities, to ensure that higher education and skills training institutions begin to offer programmes that incorporate this new technology, to ensure that employees, regulators, and citizens understand not just the possibilities of blockchain technologies but also the risks.”

According to Mr. Nwuke, there was and continues to be an increased use and development of the blockchain technology by Africans with Tunisia being the first African nation to place its fiat currency on a blockchain.

Andrew Rugege, the Africa Director for International Telecommunication Union (ITU), remarked on blockchain being a disruptive technology that although still in its development stages, has been proven to work hence a key reason why Africa cannot afford to ignore it.

“It is one instrument that Africa can use not only for financial digital inclusion but to accelerate to attainment of all SDGs. As the Specialized Agency for ICTs and telecommunication, ITU stands with Africa in this endeavor,” stated Mr. Rugege.

He said how important it is for people to trust the blockchain technology if ICTs are to become enablers in the execution of the Sustainable Development Goals (SDGs). Mr. Rugege went on to say blockchain has the capability of securing the trusted use of ICTs in a broad range of domains.

Bitcoin Empowerment in Developing Countries

Speaking at the end of the four-day conference, Mr. Nwuke said,

“We have learned that BC is an emerging technology with a breakthrough potential. We have learned harnessing this technology will require huge investments and that careful evaluation by member States and firms is needed not only to determine the suitability of the technology to help mitigate identified needs but also return on investment.”

The discussion also revolved around bitcoin and how its use can empower people living in developing nations. Bitcoin use was discussed as an avenue of facilitating low-cost remittances and its use as a liaison between other dominant currencies.

“We acknowledged that the technological environment for blockchain adoption in Africa remains challenging. Implementing blockchain requires a change in the record systems of transacting parties to evolve a common data structure,” Mr. Nwuke said.

“Put differently, blockchain solutions require significant changes to existing systems. This is an effort that is not only technically demand but also complicated and expensive. Further, we have to replace our current ways, notably, Near Field Communications, of linking physical products with digitization.”

In addition, participants agreed on the fact that blockchain implementation in certain areas is highly possible with supporting regulation and legislation. These include legal contracts, property records, elimination of financial institutions and mobile bitcoin.

As the ECA continues to work on the final report that will help guide African policymakers in this critical area, its acceptance will not only strengthen the use of blockchain technology in African nations but will also help in the widespread adoption of digital currencies such as bitcoin in Africa.

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