Technological advancement is the in-thing across the world and Africa is not left out. In recent times, it has been observed that Africa is fully embracing the use of technology in all spheres of life for development.
One of the new technologies that are being widely embraced is blockchain. Blockchain technology offers distinct advantages over database technology as it provides for the trustless recording of transaction data without relying on an existing intermediary
African countries need technological innovations, such as blockchain, to achieve socio-economic development and meet up with their counterparts at the global level.
These technological innovations are capable of turning around the face of the continent through infrastructural development and effective management of scarce resources.
With blockchain on its way to becoming a key element in the next digital transformation of the global economy, Africa is yet to fully tap into the technology’s potential.
Blockchain technology is increasingly gaining attention and building resources in several parts of the world.
It is a system of recording information in a way that makes it difficult or impossible to change, hack, or cheat the system.
A blockchain is essentially a digital ledger of transactions duplicated and distributed across the entire network of computer systems on the blockchain.
The relevance of this to the African states can not be quantified as business leaders and entrepreneurs have realized that these financial capabilities can be used as a tool to inspire economic growth on the continent.
Given the challenges like corruption, fraud, lack of accountability, and co-facing the continent, blockchain technology has become unavoidable to chart a new path as it has proven to be adaptable enough to create smart contracts for all sorts of applications and can improve transparency, efficiency, security, and trust between business partners in Africa.
Blockchain technology can be used to build a permanent, public, transparent ledger system for compiling data and tracking digital use and payments to support transparency and accountability in Africa which in turn will open p the continent for more foreign investment and development.
This is so as the adoption of blockchain technologies will offer users several options that will ensure ease of doing business transactions.
Since business development is key to development, the growth of e-commerce and other start-ups in Africa can be advanced through these technologies.
With that, Africans can now grow their economies and expand globally without any border restrictions or interference.
Overall, blockchain can elevate African economies by making it easier for African businesses and entrepreneurs to develop new opportunities and maximize their full potential, primarily through the Africa Continental Free Trade Agreement which has been held back by costly and time-consuming border procedures.
For good governance, the adaptation of blockchain will lead to a digitally-led government that helps to protect data, streamline governance processes, and reduce fraud, waste, and abuse while also increasing trust and accountability among leaders and their citizens.
It can also create value in the area of voting systems in Africa such that blockchain-based voting systems would be adopted. By so doing, eligible voters can participate and vote in their local elections.
For institutions across the continent, the adoption of blockchain technologies can also help them properly manage and formulate strong supply chain systems for the continent to address some of the socio-economic problems.
Another interesting part of blockchain technology for African states is that it can lead to an overhaul of traditional and tired systems of administration. It is capable of synergising African countries by fostering a sense of unity and abiding by free trade agreements through the promotion of regional digital currencies, which will, in turn, promote intra-African trade.
In the area of fighting corruption which is a predominant challenge plaguing the continent today, the adoption of blockchain will work perfectly to address this issue and reduce it to the barest minimum. This is because blockchain technology unlike conventional technology does not give room for alterations once the records are entered into it.
With around 370 million Africans classified as unbanked, one of the major areas in which blockchain can also make a meaningful impact is financial inclusion which is critical to the economic development of a nation.
Despite the several benefits, one will then wonder why policy leaders and constituted authorities across Africa are not adopting blockchain technologies as there are still some hesitations within African governments towards fully embracing and adopting blockchain technologies.
This can be attributed to seeming loss of control, absence of clear-cut regulatory frameworks, poor understanding of the use of these technologies, fear of money laundering activities being facilitated through virtual money as well as the challenge of funding for blockchain technologies in Africa.
However, in recent times, funding has increased for blockchain technologies on the continent as investors continue to see the potential inherent in the continent.
This was evident in the report by Swiss venture capital firm, CVVC in partnership with Africa’s largest financial institution, Standard Bank, which showed that millions of capital were being pumped into Africa in the form of blockchain financing.
The report showed that 41 African blockchain startups in eight countries raised $127 million in 2021 with 96% of the funding going to Nigeria, Kenya, South Africa, and Seychelles.
To further integrate blockchain technology, some African countries have gone a notch higher than others by creating enabling platforms that can sustain the technology or through private sector investments in technological innovations.
In South Africa, the government is collaborating with others from the BRICS nations namely Brazil, Russia, India, and China on research into blockchain’s potential for trade and other enablers of growth. So also is the continent’s largest financial institution, Standard Bank, which has joined Marco Polo, a blockchain-based trade finance network to help unlock access to blockchain finance throughout the 20 African countries where it operates.
Another instance is in Nigeria where Convexity, the first dedicated Nigerian Blockchain hub got launched in 2021 with the intent of creating a hub ecosystem that would encourage the generation of innovative solutions in the country.
Also, in Nigeria, the National Information Technology Development Agency is at the forefront of developing policies to ensure that blockchain technology is effectively utilized.
Elsewhere in Kenya, a start-up technology company, Raise, used blockchain to create the first security platform that securely tokenizes assets and in April 2021, the Ethiopian education ministry created a national database that uses blockchain to store students’ identities, allowing the ministry to measure their performances.
There is however still the urgent need for other African countries and their private sector players to be more proactive in engaging and actively embracing blockchain technology as well as formulate regulatory frameworks that will regulate the use of the technologies in Africa.
Though the impact of blockchain technology on the African continent is unquantifiable, achieving them will take some time and effort as the technology cannot completely override existing traditional practices but will gradually set the pace for an upgrade of all systems and structures.
