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How African Economies Can Benefit From Blockchain Technology

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An economy is only as good as its gross domestic product (GDP), political climate, and technological development. In many parts of Africa, these three factors are left wanting. Most African economies have low GDPs, unstable political systems, and limited internet coverage. Fortunately, the blockchain provides a technological solution that can help to improve African economies.

According to a report by Standard Media, a simulation carried out by IBM found that blockchain adoption in the economies of South Africa, Kenya, and Nigeria could lead to lower prices, improved real GDP and fiscal balances across every country.

Improved Import and Export Trading

The benefits of blockchain technology in import and export trading are plentiful. The blockchain can enhance customs control, decrease theft, and improve payments to suppliers.

According to City Press: “Banks […] still issue letters of credit to importers, a practice that has remained virtually unchanged for 700 years since its origin in medieval Italy.”

The blockchain can eradicate this issue by creating trust. Intermediaries can be eliminated and the costs of transactions decrease. The blockchain also offers faster trading between businesses, provides real-time data of goods moving in and out of a country, and eliminates barriers such as cross-border regulations, fraud, and customs delays. When all the friction that works against trading is removed, the GDP of an economy will improve as a result.

Perhaps the biggest winners from blockchain-based trading systems will be SMEs. SMEs often have limited financial abilities to cover high trading costs and long transaction processes. The blockchain can get rid of these issues by making it easier for SMEs to export or import products.

Increased Financial Inclusion

Africa has a large unbanked population. According to 2014 World Bank statistics, only about 30 percent of the population in Sub-Saharan Africa have bank accounts. Some of the reasons why so many individuals are unbanked include poverty, lack of documentation, and inaccessible financial institutions.

Luckily, the blockchain has the potential to increase financial inclusion by formalising property such as land. It is not uncommon to find Africans with large pieces of land living in poverty. By formalising this land using blockchain technology, the landowner receives legal protection and a sense of trust. That means that any transaction concerning the piece of land is accessible and cannot be interfered with. Perhaps most importantly, the landowner can use the land as collateral for a loan to develop the land and hence get himself/herself out of the impoverished situation. A company like Land LayBy, for example, is making strides towards applying blockchain technology to the real estate sector in Kenya and Ghana.

The blockchain can increase financial inclusion which in turn increases the spending and investing power of those who were previously unbanked.

Better Delivery of Services by Financial Institutions

A study by the Cambridge Centre for Alternative Finance indicates that 30 percent of distributed ledger technology (DLT) use cases fall under banking and financial services. The study, for instance, found that possible DLT applications that central banks are investigating are the issuance of digital currencies, records management, audit trail, and payments.

On the other hand, a study by Accenture found that banks can save about $10 billion by applying blockchain in clearing and settlements. In Africa, banks refrain from setting up in remote areas due to operational costs concerns. However, by saving on clearing and settlement costs, banks in Africa might be able to afford to reach the unbanked population.

The blockchain has the ability to improve the process of updating customer records and providing digital identities to those without documentation papers. As a result, refugees, for example, could easily access financial services and contribute to the economy of a host country.

Faster Remittances

Remittances play a crucial role in African economies by indirectly contributing to the GDP. Sending remittances through a blockchain-based system takes a shorter time than using conventional money transfer operators such as Western Union.

Additionally, the blockchain eliminates third parties and consequently eliminates extra transaction fees. As a result, more money can come into the continent once blockchain-based remittances are being embraced by the general public.

Transparent Spending of National Expenditure

Money allocated to ministries and various departments in government often goes missing due to corruption. Consequently, projects that need implementation are often postponed to an undefined time period. In addition, potential job opportunities that could have been created are lost. Inquiry committees that are created to find the culprits often provide zero results.

A blockchain-based system that allows all stakeholders to view how the taxpayer’s money is spent might go a long way in providing transparency in state financial matters. In fact, such a system might be improved further by giving the taxpayer a degree of decision making power when it comes to how much to allocate to every sector and which remuneration cuts should be made in order to bridge budget gaps.

 

Currently, blockchain startups, governments, and financial institutions are still experimenting with the possible use cases for this technology. Blockchain adoption will not happen overnight in Africa but over the coming years, it will be no surprise to see more blockchain-based systems in place in both the public and private sector that will benefit African economies. 

Blockchain Technology

Blockchain Association of Africa, AfriPlains Digital And Blockchain Worx to Launch Blockchain Innovation Centres Across Africa

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Blockchain Association of Africa

South Africa-based Blockchain Association of Africa will collaborate with Afriplains Digital and Blockchain Worx to equip Africans with blockchain education, tools, and expertise to shape the continent’s future.

The Partnership

Africa Next Big MarketThe partnership aims to promote technology education, community outreach, and local talent in order to increase blockchain adoption across Africa. As a result, the three partners envision that these efforts will contribute business value to the continent.

To achieve this goal, the partnership will establish Blockchain Worx’s Blockchain Innovation Centre in Tanzania, South Africa, Rwanda, and Uganda.

The Chairwoman for the Blockchain Association of Africa, Yaliwe Soko, said: “Africa is no longer the Dark Continent, and everyone is looking at Africa now. Blockchain will ensure that Africans are now stakeholders in what the continent has to offer and it all starts with education. This partnership will ensure that the upcoming generation is equipped with the right skills and expertise to move the continent further.”

The Blockchain Association of Africa is an organisation that brings together blockchain stakeholders from across the continent to drive collaboration, innovation, and education while Afriplains Digital is a next-generation technology services company based in Tanzania. The company uses technologies like the blockchain to solve business and socio-environmental issues.

Blockchain Worx is a FinTech-RegTech venture with its headquarters in Singapore. Blockchain Worx offers solutions such as anti-money laundering transaction monitoring systems and securities tokenisation platforms.

The Blockchain Innovation Centre

The Blockchain Innovation Centre will help both private and public institutions to understand and leverage the blockchain.

The innovation centre offers a wealth of knowledge, ready-to-use development tools, and a set of PoC/demo applications that help institutions to deploy their own blockchain innovation labs in a short period of time. These resources help institutions with understanding the technology and building and evolving applicable use-cases.

“We are super excited to team up with the Blockchain Association of Africa and Afriplains Digital to deploy our premier Blockchain Innovation Centre solution across communities and local chapters in Africa. We truly believe that Africa has potential to lead the way for the rest of the world and showcase how to effectively leverage and make use of technological advances for sustainable and inclusive growth,” said Sumantra Naik, co-founder, and COO of Blockchain Worx.

The Potential of Blockchain Technology in Transforming Africa’s Economies

According to an article by Briter Bridges, blockchain technology could be what Africa needs to catch up with developed countries. While this impact is yet to be seen, interest in the blockchain across the continent is depicted through events, communities, blockchain trials, and government support.

Merlin Van Lawick, Director of Afriplains Digital, observed: “As the interest in blockchain technology gains momentum across Africa, […] it becomes imperative that we build the necessary infrastructure and ecosystem [to] create awareness, provide effective tools to develop skills and talent locally, and create innovative use-cases that are truly designed to solve the problems that we as African businesses and society experience.”

The Blockchain Innovation Centre could, therefore, be one of the steps that will help Africa to catch up with developed economies.

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Closing the Blockchain Gender Gap in Africa: An Interview with Blockchain Ladies Africa

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Building permissionless, decentralised networks are some of the founding principles of the blockchain revolution. These networks allow people (especially those disadvantaged by the current system) around the world to build products and create wealth without the approval of gatekeepers.

Women are a huge proportion of the world’s population underserved by the current financial infrastructure, which would make their involvement in the blockchain industry the highest in the world. However, that is not the case.

Bitcoinafrica.io had an exciting chat with Doris Ojuederie, the founder of Blockchain African Ladies (BAL) and organiser of the biggest women’s blockchain conference in Africa, about the current level of participation of women in blockchain in Africa.

The Blockchain Gender Gap

Doris Ojuderie

Image by Blockchain African Ladies

There are thousands of blockchain projects mostly run and used mainly by men. But considering that blockchain projects are built to be used by diverse demographics, it only makes sense that the industry has a variety of perspective.

“Women participation in blockchain is improving, but we aren’t there at all. So many are yet to know that a technology like this exists,” Doris Ojuederie was quick to say.

She went on to explain that the main issue is that the majority of women are “not in places of information where they will obtain information about the blockchain tech,” and thinks participation is currently at just 35 percent.

Even this small number seems optimistic as data compiled by Coin.Dance suggests that women make up less than ten percent of engagement related to Bitcoin. Even in other areas of blockchain other than technology, like legal services, marketing, and sales, trading, or user support in crypto companies, there is still low participation from women.

Women Role Models And Awareness Could Bridge the Gender Gap

You cannot be what you do not see. Lack of women role models is regarded as one of the limitations to the representation of women in the blockchain industry.

“The very few women disruptors aren’t very vocal with their activities. Being vocal will motivate other women to love to learn about this technology,” Ojuederie said. Also, she gave mainstream media some knocks for doing too little in projecting the work of the few women building innovative projects in the industry.

Some women have been vocal about their work in the crypto industry though. Women like Doris Ojuederie, whose non-profit organisation (BAL) organises conferences, workshops, webinars, and online training for women and is currently offering a scholarship to women to become blockchain developers. Bitcoinafrica.io was at the BAL’s Blocktech Women Conference in Lagos, which provided women with practical skills in crypto trading, computer programming, and other opportunities.

There is also Alakanani Itireleng, founder of Satoshicentre, who is one of the pioneers of bitcoin in Africa, and Ire Aderinokun, the co-founder of peer-to-peer exchange Buycoins, who recently tweeted an opportunity for women interested in crypto trading, among many other women who have helped accelerate adoption on the continent.

Encouraging More Women

Ojuederie believes that the blockchain community could help women participate by:

  • Giving the few women disrupting the space more media coverage
  • Supporting and sponsoring programmes and events that encourage women participating in the blockchain ecosystem
  • Organisations should include a good percentage of women in their teams, as advisors, developers, and executives

If you want to learn more about women in blockchain and the work of BAL, visit Blockchain African Ladies.

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BanQu is Leveraging the Blockchain to Give Refugees a Digital Identity

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BanQu

BanQu, a software company focused on eradicating global poverty, is leveraging blockchain technology to provide refugees with a digital identity so that they can continue to take part in society.

Linking Refugees to the Global Economy Using Blockchain Technology

Refugees and displaced persons can continue to live their lives independently thanks to the BanQu blockchain-based solution, which allows them to store their information on a distributed ledger. That means that with their information digitally stored and accessible from anywhere, they can look for jobs, apply for loans, and run their own businesses, thereby, contributing to the host country’s economy.

Hamse Warfa got the idea for this solution after experiencing the refugee life in the Daadab Refugee Camp in Kenya. After escaping Somalia with his parents during the civil war at the age of twelve, Warfa knows how it feels like to have one’s life turned upside down so suddenly, Fair Planet reported.  His parents, once thriving business people, were now dependent on charity.

“I want all refugees to be able to build transaction-based economic identities that allow them to thrive, including getting loans, and accessing credit for things like businesses and eventually homes. BanQu is for the world’s poor, refugees, and stateless people so they can live their lives like the rest of us,” Warfa stated in an interview.

How it Works

BanquTo use the BanQu blockchain solution, a user creates a digital profile via a mobile phone where they enter their information. A third party, who must also be verified, verifies this information, which is then stored on the blockchain. A user can access his or her information at any time.

Users can also store their financial transactions, health records, education records, and credit histories on the BanQu app, thereby, enabling them to participate in the global economy.

Furthermore, the BanQu blockchain solution also benefits organisations and governments that interact with refugees. For instance, the BanQu platform allows governments to track aid resources that have been disbursed to the target population.

More than 25,000 people across four continents are using the BanQu solution and the company is striving to reach more than 100 million underprivileged people by 2028.

Dr Riby Okoth, a lecturer at the School of Security, Diplomacy, and Peace Studies at Kenyatta University in Kenya, said: “Having the refugees, for example, use their digital footprint to access financial services or job opportunities as the rest of the population not only reduces the culture of dependency but also opens up the global economy to more participants who are growing it rather than depending on it.”

According to the UNHCR, there are about 68.5 million people displaced from their homes and among them about 25.4 million refugees and approximately ten million stateless people.

With BanQu’s blockchain solution, these people could have the chance to live normal lives where they can access education, healthcare, loans, and employment.

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