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3 Potential Uses Cases For Blockchain In Africa

Adoption Africa

Blockchain Crime Transparency

Author

Godfrey Benjamin

Author

Godfrey Benjamin

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Last updated:

January 9, 2024

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While blockchain technology still can be considered to be in its infancy, some regions, particularly Asia, have advanced in their blockchain-related developments and integrations.

Meanwhile, in Africa, for a region replete with many notably corrupt governments, a little more embrace of blockchain technology may come handy in helping to solve issues relating to money laundering, electoral malpractices, and identity management.

According to a survey conducted by Transparency International in 35 African countries 2016-2018, more than half of all respondents said that corruption is getting worse in their country and that their government is doing a bad job at tackling corruption.

How can blockchain help? If it can help at all.

Tackling money laundering

Money laundering is perhaps one of the notable challenges of most African economies. The prevalence of siphoned funds from government officials to cyber fraudsters begs the need for a complete overhaul of the existing anti-money laundering (AML) transaction monitoring process.

Possibly, blockchain could help automate the process of AML fraud detection.

The real-time registering of transactions made on the blockchain would be made available in a public ledger for easy reference which can make the fight against money laundering easier, transparent, and more result-oriented.

For example, the South African Reserve Bank and major blockchain company ConsenSys partnered to develop Project Khokha. “Once Project Khokha achieved its targets for performance, scalability, resilience, confidentiality, and settlement finality, the team shifted its focus to the sharing of know your customer (KYC) and anti-money laundering (AML) payment information between banks,” according to ConsenSys.

Enhancing electoral transparency

Most African countries practice democracy but almost all struggle with electoral malpractices. Can blockchain be a solution to this?

While this use case is still controversial due to its complexity, importance, and multiple risks, some countries are already trying to implement it, but the results are mixed.

Meanwhile, during presidential elections in Siera Leone in 2018, Agora, a Swiss foundation focused on digital solutions, was reportedly accredited as an independent observer by the National Electoral Commission (NEC) to test its permissioned blockchain technology during elections. However, back then, the NEC stressed that it “has not used, and is not using #blockchain #technology in any part of the electoral process.”

In either case, as attempts to use blockchain in voting are still being made, it might bring new viable solutions one day, helping boost transparency across Africa too.

Identity management

The use of blockchain technology to bolster identity management is also a major potential use case in which blockchain could help reduce fraud in African countries prone to identity theft.

With a blockchain managed identity system, both individuals and institutions might have better control over their personal data and prevent identity theft.

For example, in 2016, blockchain-as-a-service software company BanQu, now with offices in the US and South Africa, attempted to create blockchain-based digital “economic identities” for refugees in Kenya. However, on the website of the company, there are no other details about this project and its results.

Non-blockchain challenges remain

And while blockchain-powered solutions are still being explored, other challenges might prevent them from being implemented across Africa even if they prove to be successful.

In November 2017, the United Nations Economic Commission for Africa (UNECA), said that if Africa is to use blockchain technology as an inclusive factor of development, however, there are many challenges remaining, such as policy and regulatory implications, access to ICT infrastructures, security and trust aspects, and energy consumption.

Let’s hope that all these blockchain-related and other challenges will be solved sooner than expected, giving Africa a new chance to help its people.