By Olwuatobi Ajayi
06 November 2022 |
Africa is regarded as the birthplace of human civilisation. Africa is renowned for its rich human and natural resources. Given its extensive cultural past, dynamic climate and the vibrant scenery, Africa might be seen as the ideal land of opportunity. The opportunities on the continent are not restricted to its untapped potential. More importantly, there…
Africa is regarded as the birthplace of human civilisation. Africa is renowned for its rich human and natural resources. Given its extensive cultural past, dynamic climate and the vibrant scenery, Africa might be seen as the ideal land of opportunity. The opportunities on the continent are not restricted to its untapped potential. More importantly, there is a lot of untapped potential for technological advancements across the African continent.
Currently, there are certain challenges that are prevalent in Africa. These challenges can, to a large extent, be resolved with existing cutting-edge technologies that are already being adopted in developed countries across Europe and North America. The blockchain is one of such innovations. The technology is built on the basic tenets of anonymity, decentralisation and immutability. If these three main components are skillfully harnessed, they have the potential to quickly resolve difficulties and alter industries and sectors throughout Africa.
Some of the established industries and sectors that this technology can readily transform on the continent include, finance, supply chain management, entertainment, real estate, land administration and health care.
In subsequent paragraphs, we will show how each of these sectors and industries may successfully employ blockchain technology to solve some of their common difficulties. We will also show how blockchain innovations could help these sectors maintain a high standard, scale and ultimately live up to their potential.
The financial sector in Africa is largely composed of the activities of traditional banks and fintech (usually tagged as ‘neo banks’). It should be mentioned that neo-banks have been the primary driver of modern banking service adoption. This is because they are simple to utilize on mobile phones. Nonetheless, these initiatives have not achieved sufficient results.
According to a report, up to 57 per cent of Africans do not have bank accounts or mobile money wallets. Additionally, the World Bank also estimates that Africa has around 350 million unbanked people. This accounts for an estimated 17 per cent of the global unbanked population. Other World Bank statistics revealed that about 58 per cent of Africans live in rural areas.
Blockchain technology could be the ideal solution for creating viable and cost-effective means of financial inclusion for Africa’s unbanked. For starters, blockchain eliminates adoption barriers such as bureaucracy and paperwork. It substitutes easy steps like mobile number registration, email address, and government identity card for verification. Additionally, blockchain completes transactions faster and is more cost-effective.
Going further, issues around cross-border payment settlements are easily resolved with it. Cross-border payment service providers in Africa typically charge between 0.5 per cent and 5 per cent. This amount could be significantly lowered on the blockchain. The transactions usually cost around 0.1 per cent of the transaction amount. With an almost instant transaction speed, blockchain could be a real game changer in the African financial sector and a handful of promising projects like Ivorypay are beginning to integrate blockchain payment solutions into everyday business life.
The African real estate and land administration sectors also have immense potential for expansion and efficiency. At present, Africa is one of the continents witnessing a rapid urbanisation rate. New lands are opening up, and more buildings and infrastructure are being built to accommodate urban dwellers. Yet, it is surprising that land and property documents are still exchanged in paper form. Physical paper documents proving property ownership are fairly popular among property investors and landowners.
Governmental agencies in land administration could also benefit from blockchain. It will help eliminate the continual stacking and storage of physical files. This will be replaced by cryptographically secure on-chain protocols dedicated to land record storage. The blockchain tenet 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 wiped out in the event of a fire outbreak or flood.
It could also prove useful in the area of property investment. Blockchain, through non-fungible tokens (NFTs), can now be used to create a digital representation of a piece 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-scale investors. This could be a turning point in property investment on the continent. Essentially, investment becomes decentralized and accessible to everyone.
Product authenticity is yet another issue that blockchain could help tackle in Africa. Consumers can often find it difficult to certify a product’s legitimacy, despite the fact that there are institutions and organizations that undertake checks and assure product uniformity. As a result, consumers are faced with the dilemma of authenticity. A blockchain solution to this dilemma is possible and feasible. Companies and brands can adopt blockchain to leverage NFTs as a means of authenticity. NFTs will create unique, permanent proof of authenticity on the blockchain. Links to these NFTs can then be embedded in products in the form of barcodes. Users can scan these barcodes to confirm product authenticity.
Healthcare is another sector where blockchain can be used to standardize processes in Africa. At the moment, centralized healthcare databases are largely nonexistent. It is common for each healthcare center to have its own record room where patients’ 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 medical practitioners who might be involved in a patient’s treatment at a later time.
It can also be deployed in the African entertainment sphere. Issues around piracy have affected the African entertainment industry for decades. Quite often, movie stars lament how piracy affects their income and profit margins. This usually comes after spending huge sums on production. Blockchain could be deployed to prevent such occurrences in the future. Movies and other entertainment intellectual property can be minted as NFTs on the blockchain. These NFTs are then sold on dedicated marketplaces to consumers. Users who have successfully purchased the NFTs are then granted access to the content. Content will stay digitally encrypted, and piracy can be eradicated.
Another way to go about using NFTs in the African entertainment industry is by issuing NFTs as passes to events. This medium helps to simplify event ticketing and remove the long lines that are a common sight at movie theaters and public performances.
The African education sector can also benefit from blockchain technology. The sector could adopt blockchain technology as a means of storing student records.
The sector 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 that want to check authenticity can simply access digital certificates. Lastly, digital certificates save students from unforeseen occurrences like fire or loss.
Essentially, it creates an avenue for transparency and simplicity across the board. It creates a system that is fraud-proof and reliable. At the same time, its ease of use makes it accessible to every individual, thus creating a decentralized system that works for all.
The technology could serve as a springboard for long-term solutions to some of the chronic challenges limiting Africa’s economic advancement, corporate growth, and improved livelihoods.
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