The Blockchain Africa Participants Optimistic About Continent Becoming Center of Progress

Published at: March 23, 2020

The Blockchain Africa conference produced a swathe of optimism for Africa to become a driving force behind the development and use of new blockchain-powered technologies.

Over the past few years, blockchain has replaced cryptocurrency as the “it” word in the fintech space. It is a fact that was mirrored by the Blockchain Africa conference itself, with speakers focusing more on the possibilities of blockchain answering a number of industry inefficiencies, and far less on cryptocurrency trading and tokenized solutions.

Africa has its own unique challenges in the global space given that many of its countries are trailing behind the rest of the world in infrastructure development. While the asymmetric digital subscriber lines and fiber internet connectivity is still being rolled out in many countries, mobile tower services have driven the proliferation of mobile payments systems.

To say that Africans have taken to these services would be an understatement. The M-Pesa mobile payment service is a prime example that shows Africans can quickly adopt technologies that improve their day-to-day lives. Mobile network provider Vodafone estimates that over 37 million people across seven African countries currently use M-Pesa, which was launched in 2007.

This is just one example of how people in Africa have benefitted from a future-forward solution to build a bridge to the people that are unbanked on the continent. In general, fintech solutions are being readily adopted and driven by African countries and companies. As Cointelegraph reported in an event recap of the Blockchain Africa conference, blockchain technology is already being explored by trade finance, supply chain and self-sovereign identity sectors. Here are the main use cases that can be observed right now:

A solution for Africa’s ID problems

The issue of Self-Sovereign Identity is a particularly interesting one in an African context, given the difficulty many people on the continent face when trying to obtain ID documentation. By way of definition, SSI refers to a situation where individuals hold and control their own identification credentials.

Victor Mapunga, CEO and co-founder of startup FlexFinTx, made a compelling case for a move to digital-based identities at the Blockchain Africa conference. In his presentation, data quoted by Mapunda estimates that nearly 400 million Africans do not have proper identification credentials. This then leads to a multitude of difficulties, as these people are unable to open bank accounts, apply for insurance or other financial products.

Related: Blockchain Digital ID — Putting People in Control of Their Data

Being banked and having insurance is a luxury when considering the deeper problems that are plaguing the continent. Referring to information supplied by the Mo Ibrahim Foundation, only eight African countries have birth registration systems that cover 90% of the population.

Countries like Chad and Tanzania are only able to cover 12% of births in the country. Conversely, Egypt, Mauritius and Seychelles are the only three African countries that register deaths covering more than 90% of their population.

The key takeaway is that there is a sizable gap in providing Africans with vital identification documentation, which is primarily due to institutional inefficiencies. Data capturing and information sharing is therefore impacted, leaving various institutions lacking in information, unable to serve the public needs efficiently.

Mapunda hails from Zimbabwe and began exploring the issue of SSI when he faced his own difficulties in trying to register a bank account after studying abroad. FlexFinTx seeks to provide people with a digital ID through WhatsApp, which facilitates the issuance of a FlexID that is cryptographically secured by the Algorand blockchain. Users then have self-sovereign control over how their data is shared. Speaking to Cointelegraph after his presentation, Mapunda said that African people can quickly take to solutions that solve wide-ranging problems:

“I think Africans, when it comes to adoption of technology, are some of the most dynamic people in the world, this is because, for the most part, we don’t have a lot of legacy infrastructure and institutions. Most of the things we’ve grown up with didn't work.”

Mapunda pointed to innovations such as mobile money and internet-based communication applications drastically improving Africans’ quality of life, saying, “Mobile money is a great example. We jumped on it,” and adding that no one even had to market it to the population. He went on to expand further:

“WhatsApp is a very good example of an application that didn’t have a single billboard, yet it managed to spread like wildfire across Africa. It solved a major problem — the cost of communication was too expensive and it's a natural solution that people gravitate to.”

An answer to supply chain challenges

Blockchain technology has long been touted as a key tool in improving current supply chain systems across the world. In the past three years, major strides have been conducted in this regard, providing real use cases to back up the theory. The subject was covered extensively at the Blockchain Africa conference and was particularly important considering the implementation of the African Continental Free Trade Area in May last year.

The move created a free-trade area that now includes 28 African countries, which requires member states to remove tariffs to provide the free trade of goods and services. While it improves the ease of trade, there are still some hurdles to clear in the trade finance and supply chain.

Thavash Govender, a data and AI specialist at Microsoft South Africa, spoke to Cointelegraph during the summit and said that blockchain technology could hold a number of benefits for trade across the continent:

“The one challenge that we have at the moment is trust between different countries. If I’m going to drop my trade barriers and say you can bring all your products into my country, I need to know that we aren’t allowing counterfeit goods in.”

Perhaps more importantly, Govender suggested that systems that are improved through the use of blockchain technology could drastically reduce the amount of time it takes for trade to take place due to inefficiencies in various processes, elaborating:

“If I’m an SME, I’m going to open up to a whole bunch of institutions that I just don't know. If we're all part of the same blockchain consortium, then I know I can trust what is written on the chain. Because I can trust the information, I can move a lot quicker. It’s not going to take me weeks of investigation, so I can grant loans quicker or get the trade finance process going a lot faster.”

Public procurement and corruption

Another interesting implementation of blockchain technology is in the space of public procurement by government organizations. Corruption is not a uniquely African problem, but it is one that affects many countries on the continent. Sope Williams-Elegbe, a professor and deputy director of the African Procurement Law Unit at Stellenbosch University, gave a presentation on the possibilities of blockchain addressing corruption in public procurement.

Related: Zimbabwe U-Turns on Crypto, Looking to Stabilize Local Economy

Williams-Elegbe said that 15%–22% of South Africa’s gross domestic product goes to public procurement. The problem is that the country loses 50% of this to corruption and fraud.

The professor believes that blockchain could be used to address procurement corruption but admitted that there are few to no use cases as of now. There is a lack of technical applications for public procurement, and it presents an opportunity for new solutions.

Forget the hype, build on working tech

Michelle Nsanzumuco, who acts as a senior advisor to the government of Bermuda and the Africa lead for Fintech4Good, spoke about a number of the sectors described above as being potential drivers of blockchain technology.

In an interview with Cointelegraph, Nsanzumuco highlighted supply chain and logistics as the key industry that can leverage blockchain due to the complexities of trade created by the sheer number of players in a value chain. Nsanzumuco said that a number of entrepreneurs and SMEs that she has interacted with often complained about the difficulties they face when conducting trade inside their own country:

“They’re finding barriers just within their own countries because they’re dealing with so many different players, fill in so much documentation before they can even get their products from A to B. Now we haven't even talked about cross-border transactions and trade. I can see it being a very strong use case for Africa specifically around supply chain and health care.”

Nsanzumuco added that blockchain solutions could improve the way health care systems track vaccinations and medications. Another factor is improving government services by digitizing a variety of manual data-capturing processes. Additionally, while strongly agreeing that the continent could be a leader in the blockchain space, Nsanzumuco cautioned against touting “blockchain” tech because of its marketability:

“A big warning for me having traveled around the world is not getting caught up in the hype. Let’s leverage real solutions in particular sectors where it can have an impact in Africa.”

Tags
Related Posts
South Africa learns a hard crypto lesson amid fast growing demand
Authorities in South Africa appear to be paying closer attention to the cryptocurrency space in 2021 in the wake of a major Bitcoin (BTC) Ponzi scheme and increased trading activity. As a result, the South African Financial Sector Conduct Authority has called for tighter controls of the crypto space following the collapse of what has been described as the biggest Ponzi scheme the country has ever seen. In December 2020, Mirror Trading International went into provisional liquidation after one of its directors allegedly skipped the country, taking with him access to a copious amount of Bitcoin that investors had entrusted …
Adoption / Feb. 9, 2021
Can blockchain make a difference? Africa sees vast monetary potential
As technological innovations continue to spread across Africa, the continent could provide some unique use cases for blockchain technology. African has been continually driving innovation in a number of spaces, with mobile payments a prime example of the potential for technology to drastically improve the lives of everyday Africans. While many countries in Africa are still considered to be developing economies, some of its most prominent states have been at the forefront of technological innovation. The use of blockchain technology is becoming part of the equation as it permeates different industries and institutions. Michelle Chivunga, CEO and founder of digital …
Adoption / Nov. 15, 2020
Africa Using Blockchain to Drive Change, Part Two: Southern Solutions
With pundits like Twitter CEO Jack Dorsey predicting that Africa “will define” the future of Bitcoin (BTC), cryptocurrency and blockchain technology continue to attract interest from both public and private establishments across the continent. Many of these adoption cases have been moving beyond finance, developing solutions targeted at issues like unemployment, identity management, health care and supply chain, among others. Amid the growing enthusiasm for crypto and blockchain technology in Africa, industry stakeholders interviewed by Cointelegraph identify a lack of education as one of the major hurdles standing in the way of more broad-based utilization of the technology. The absence …
Adoption / April 5, 2020
Blockchain Africa Conference: Education Is Key Crypto Adoption Driver
Cryptocurrencies have seemingly taken a backseat due to a concerted focus on blockchain technology in Africa, but there is still a growing interest and demand for trading on the continent. This was one of the main takeaways from the Blockchain Africa conference held in Johannesburg in the middle of March 2020. The Blockchain Africa conference, which is the biggest in the continent, has become heavily focused on the technology underpinning cryptocurrencies like Bitcoin and far less so on the crypto trading space. It is a fact that was admitted by event MC Tanya Knowles, who recently became Binance South Africa’s …
Adoption / March 24, 2020
Blockchain Africa Conference Showcases How Tech Can Change the Continent
Impressive use-cases of blockchain technology have come to the fore after the conclusion of the 2020 Blockchain Africa Conference in South Africa. The event went ahead as planned in early March despite the global coronavirus pandemic that has made headlines around the world. The viral outbreak led to keynote speaker Charles Hoskinson, founder of Cardano, cancelling his trip to South Africa due to travel restrictions. The event also suffered a drop-off in attendance due to fears around the virus, but there were still over 230 delegates present on day one while day two numbers dropped slightly. Renowned cryptocurrency investor and …
Adoption / March 13, 2020