Can blockchain improve social infrastructures in the poverty-ridden continent of Africa? Well, a disclaimer for you, some of us think it could.
In case it’s not already obvious to you, blockchain is coming into all mature markets. Corporate entities control over ecosystems is diminishing. Many are already launching blockchain solutions for payment processing, supply chain management, among others. Financial institutions and tech giants are also experimenting with distributed ledger technology. However, less known applications of blockchain come from home-grown innovators. These are startups from frontier markets, mainly African nations, using blockchain for nearly everything.
Blockchain for Africa – Truth or Rubbish?
So, what makes Africa, the right place for blockchain-powered innovation?
Recently, the Chinese government under Xi Jing Ping committed to investing up to $60 billion in Africa. With these funds, African nations will be looking to take advantage of China’s enthusiasm, to invest more in infrastructure development. As a result, various industries are emerging, consisting of mainly Chinese business setting up around the continent.
Why is this significant for blockchain application on the continent? Remittances and cross-border money transfers.
What about infrastructure development, connectivity, and skilled labor? Africa is using a portion of the Chinese loans on ICT development, making it a natural place blockchain. For instance, in 2014, Rwanda expanded its fiber-optic backbone for maximum country-wide coverage.
The undersea network connects all districts and border posts. Moreover, the government has already reached an agreement with South Korean Telecom companies for the extension of the 4G network to the rest of the country. Eventually, the government hopes that the increase in capacity will benefit schools, healthcare, and other institutions.
On the other hand, Kenya’s mobile money service, M-Pesa, has already received widespread adoption within and outside its borders. M-Pesa is already available to Asian countries such as India, through its parent company, Vodacom. With this in mind, many decisive themes of blockchain application have come up. For example, blockchain may one day solve problems, such as land titling, and financial inclusion.
Blockchain for Africa – leading frontiers for blockchain application and adoption
M-PESA can be a backdrop for payment processing which could accelerate blockchain adoption. Some of the areas of focus for blockchain technology are micro-lending, short-term credit, energy, and distribution. At the moment, businesses looking to make a social impact are already gaining traction.
At the same time, these startups are already attracting significant investment, especially those working on applying blockchain for improving access to energy. In fact, start-ups that focus on micro-lending have achieved immense commercial success within countries such as Rwanda, which now has almost country-wide internet coverage.
With this purpose in mind, blockchain technology has great potential of improving long-standing inefficiencies in Sub-Saharan Africa, improve government and corporate transparency, and reduce production costs across multiple industries. However, provided that Africa continues to experience political instability, the realization of a transparent future becomes opaque.
Do you agree with us? Let us know your thoughts in the comment section below.