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How African Economies Can Benefit From Blockchain Technology

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African economies blockchain technology

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

AI and Blockchain-Powered Project CareAi Could Improve Healthcare in Africa

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CareAi

CareAi is a project of the Joint Research Centre from the European Commission that has the potential to improve healthcare services in Africa through the use of artificial intelligence and blockchain technology.

The open-source solution provides intelligent and anonymous healthcare and can diagnose diseases like typhoid fever, malaria, and tuberculosis within seconds through the use of AI. The aim of the project is to reach out to undocumented migrants, ethnic minorities, and populations secluded from healthcare systems. The anonymous nature of CareAi also allows patients such as migrants to receive a diagnosis without worrying about deportation.

How It Works

CareAi is a machine featuring a finger prick and a lab-on-a-chip technology initiated by a Harvard University chemistry professor called George Whitesides.

To receive a diagnosis, a patient will have their finger pricked and the blood sample is deposited on the chip, put in the machine, and anonymised. Once this is done, CareAi’s AI-powered health assistant analyses the sample by referencing it to a wide range of medical and diagnosing data and then displays the results on a screen and provides a printout for the same.

The results come with actions that the user should take such as getting a prescription from partner chemists or seeing a participating NGO doctor that provides anonymous treatment and who can claim back payment for services rendered.

Additionally, CareAi correlates medical data with records of academic data and journals anonymously. The anonymised data is securely stored on the blockchain while smart contracts manage the rights, permission, and access to the stored health data.

Organisations use a distributed app to access the data through smart contracts. For instance, if a government wants to access the stored data for policy purposes, it has to buy tokens called CareAi Points. These tokens are then used to pay the participating healthcare NGOs and for machine maintenance.

According to a Medium article by Lucas Lorenzo, these points can propel “economic interactions in the form of a valued currency, locally and at scale; exchanging economic value and intelligent healthcare feedback for anonymised data.”

The Possible Applications of CareAi in Africa

CareAiAlthough CareAi targets refugee camps in Europe, the technology could also make a positive impact on the African continent according to the founder of cloud-based health records platform Medcera, Ndubuisi Ekekwe. He believes:

“[…] Products like CareAi could become catalytic when they begin to penetrate into villages and cities across the continent. If AI systems could handle some of the minor healthcare issues, the available healthcare professionals could focus on the most difficult issues.”

Ekekwe also says AI systems, such as CareAi, can enhance drug prescriptions where the medical history of a person is entered into the system. This enables the AI system to confidently prescribe drugs and connect the patient to the right pharmacy.

However, he notes that although AI and blockchain technology could change the healthcare systems in Africa, nations must invest in other areas such as training more healthcare professionals and installing electricity and clean water in all healthcare facilities. He also believes that the challenge of inadequate data has to be solved for AI to have a future on the continent.

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Blockchain Technology

Kenya’s RideSafe to Receive $140,000 in Funding from Aeternity Starfleet Incubator

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RideSafe

Kenyan tech startup RideSafe is set to receive $140,000 in seed funding from the Aeternity Starfleet Incubator, which it partook in earlier this year.

In Kenya, one of the easiest ways to get around is through motorcycles known as “boda bodas.” This subsection of the transport industry has been largely unregulated, creating a myriad of risks for riders and commuters alike. It is, therefore, quite likely to find riders creating associations or small social groups for their collective interests and pooling their resources and support in order to secure solutions for financing, health, and insurance.

RideSafe is a startup that has stepped up to provide health solutions for riders in real-time in case of accidents. Many riders are exposed to hazardous conditions daily. Hence, there is a need for robust solutions to safeguard their wellbeing.

Æternity Starfleet Incubator

RideSafe

Image by RideSafeApp.com

Earlier this year, RideSafe participated in the Aeternity Starfleet Incubator, which is specially designed to empower startups that seek to leverage blockchain technologies. From an initial round of 60 participants, RideSafe qualified for the shortlist of 17 teams, among which Vite and Utu were the only other African startups to participate.

Asiimwe Benson, the CEO of RideSafe, revealed in an interview that he met the Aeternity team at the World Blockchain Summit in Nairobi in early 2018, where he got an opportunity to sign up for the incubator and funding. With the $140,000 prize, the CEO intends to expand operations to serve more riders nationally; ultimately targeting the masses. The funding will also be used to build capacity and secure technical support.

Nikola Stojanow, the CEO of Aeternity Ventures, remarked that the finalists of their training program demonstrated passion, dedication, and far-reaching potential through their ability to take counsel and fine-tune their business models and road maps for best practice.

The ten teams that made it through Aeternity’s incubator have paved the way for other teams and startups to learn and gain meaningful experience in sustainably innovating solutions based on blockchain technology.

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Blockchain Technology

Coinfirm Partners with KAD ICT Hub to Launch Africa Blockchain Lab in Nigeria

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Africa Blockchain Lab

London-based blockchain regtech company Coinfirm and Nigeria’s KAD ICT Hub have launched the Africa Blockchain Lab with the aim of taking up companies focused on creating blockchain-based services and products for African economies.

The new hub based in Kaduna, Nigeria is especially interested in companies that are focused on financial inclusion and has already accommodated one such startup called Kora.

Kora, founded in 2017 by Dickson Nsofor and Maomao Hu, is a blockchain-based infrastructure for an inclusive financial system. According to the Inclusive Growth Forum, “the Kora Network will provide access to identity, secure storage, money transfer, and marketplaces on a low cost, universal access platform accessible via SMS/USSD on feature phones, or with internet access via a mobile app, enabled by blockchain technology.”

CoinfirmCoinfirm’s co-founder and CMO Grant Blaisdell said in a press release: “A Silicon Valley out-of-the-box solution approach has generally not worked in regions such as Africa; it requires a ground-up, organic approach. Coinfirm has already successfully built leading blockchain solutions, the largest structured blockchain database and coverage, and the first blockchain lab for Central Europe. Now, working with KAD ICT Hub, who share our vision of bringing transformative, blockchain-based solutions to African markets, and who have the local knowledge and expertise, we are going to do the same in Africa.” He added:

“We want to work with and provide opportunities for African entrepreneurs working in one of the most exciting and disruptive fields today while bringing our own solutions like our AML/KYC Platform and AMLT Network.”

The KAD ICT Hub

Launched in 2017, the KAD ICT Hub based in Kaduna, Nigeria is an IT innovation hub that receives support from the Nigerian government.

Africa Blockchain LabCo-founder and chief executive of the KAD ICT Hub Yusuf Bashir said: “[…] The transformative potential of blockchain is enormous, and we are confident that, working with Coinfirm, we can provide the testbed and support for today’s leading African blockchain companies, giving them the opportunity to become global leaders. Here in Kaduna, Nigeria’s third-largest state in terms of population, and leading learning and innovation hub, we are extremely fortunate to have a governor who is not only supportive of what we are doing but had ensured we are backed by the Kaduna State Government.”

The hub has been working with Trudatum, Coinfirm’s blockchain-based data document verification platform, which Poland’s largest bank PKO Bank Polski has recently started to use. Additionally, Trudatum could be used in Nigeria to securely store documents in government institutions and universities.

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