African countries are no strangers to the use of digital solutions for money transfers, nor to the rapid implementation of such technologies. It is often said that the pervasiveness of mobile telecommunication usage in Africa, enabled the continent to leapfrog many first-world countries. Mobile phone usage grew from less than 3% to 80% in under a decade. There is already an abundance of local mobile and e-payment platforms that have seized this as an opportunity to develop innovative ways to reduce the friction associated with transferring money across the continent. An example is Kenya’s M-Pesa, which has been around since 2007. The platform, which allows customers to send and receive money via mobile phone, already handles transfers of more than 25% of Kenya’s GNP, leading to greater consumer confidence in financial technologies.
Sub-Saharan Africa is also reported to have the second highest population of unbanked adults in the world, at about 350 million people, or 17% of the global total. Reportedly, two thirds of Sub-Saharan Africans do not have a bank account. Despite this, a high percentage of migrant work, both within and between African countries, results in a disproportionate need for remittance mechanisms outside of traditional banks. Foreign remittance remains a primary source of income for many African communities and households, with countries like Lesotho purportedly attributing almost a third of their GDP to remittances from abroad. These, amongst many other factors, create the ideal environment for new ways of moving value, and present many of the challenges that distributed ledger solutions aim to solve. This also presents the potential for greater socio-economic inclusiveness, such as through enhanced financial security.
So to what extent has blockchain and cryptocurrency been embraced in Africa? The results are mixed. Whilst the private sector is blazing ahead in many countries, governments have been apprehensive and reserved, and in some instances unreceptive. Countries such as Zimbabwe and Namibia have reportedly begun with a hard stance, whilst Mauritius is a regional frontrunner. The regulatory sandbox created in Mauritius, for instance, demonstrates a progressive take on the general economic benefits that could follow a friendly, and even incentivized, approach to cryptocurrencies. This creates another dimension for the potential for African countries to develop regulations around blockchain and cryptocurrency, with an intention to incentivize foreign direct investment.
Kenya does not yet have a blockchain regulatory framework in place. However, Kenya’s National Land Commission has welcomed the use of the blockchain network in creating transparency of land ownership, as it will alleviate potential fraudulent sales of land, and confusion over title to land.
Another initiative in the private sector is the launch of TMT Global Coin, a blockchain-powered logistics company that hopes to improve cargo logistics globally by using blockchain technology through smart contracts to improve the transparency and authenticity of records in imports and exports.
Kenya’s National Transport and Safety Authority has announced its intention to roll out an electronic motor vehicle identification service in Kenya where all motor vehicles will have an electronic sticker placed on the windshields, detectable only via the use of specialized technology, thereby assisting in the recovery of stolen vehicles. The network will be run on a shared blockchain platform which will alert various government agencies of the theft, including inter alia, the Kenyan Revenue Authority and the Kenyan Police.
Kenya’s public health sector is also attempting to install a smart platform in all public hospitals creating a shared blockchain hub where patients’ information and medical history may be shared. This will also enable nurses in rural areas to treat patients based on a doctor’s advice obtained elsewhere.
In addition, the Kenyan government is seeking to link the National Registration of Persons Bureau database to the closed circuit television cameras manned by the Kenyan Police, thereby enabling face recognition via blockchain technology
