/Africa Using Blockchain to Drive Change: Nigeria and Kenya, Part One

Africa Using Blockchain to Drive Change: Nigeria and Kenya, Part One

Blockchain adoption in Africa is on the rise. From transportation to the gaming and lottery industries, reports of companies utilizing decentralized ledger technology (DLT) across the continent are emerging. Several stakeholders in the African blockchain scene say DLT is the key to solving the developmental issues plaguing the continent as a whole. They also believe the technology provides a platform for Africa to elevate itself to a position of greater relevance in global affairs.

While the general attention of governments still appears minimal, some countries are reportedly taking steps to promote increased blockchain adoption. Nations such as Kenya and Nigeria have announced plans in recent months to pursue regulation and greater cooperation with the private sector to leverage the benefits accruable from blockchain utilization.

Comparison of Africa to top fintech countries

The Nigeria Union of Road Transport Workers (NURTW) and a group of partners in the private sector have already launched a blockchain-based scheme targeted at improving interstate road transportation. Stakeholders of the project say the program will improve safety, record keeping and insurance for road travelers.

However, some effort within the technological implementation needs to be dedicated to ensuring blockchain protocols are easy to use. Some commentators point to the steps taken by telecommunication service providers that have resulted in the significant penetration of mobile services across the African continent.

Related: Young Africa Looks to Crypto for Payment

The Nigerian government sets its sights on decentralized technology

As previously reported by Cointelegraph, Femi Gbajabiamila, the speaker of Nigeria’s House of Representatives, said a concrete legislative framework should be in place for crypto and blockchain regulation.

The Honorable Solomon Adaelu, a member of the House, is one of the most vocal proponents for blockchain and crypto regulations in Nigeria. The legislator is the current chairman of the bipartisan committee on blockchain technology. For Adaelu, failure to move quickly on creating an environment conducive to digital technology will see the country fall even further behind in terms of technological advancement.

In a series of motions brought up before the House, Adaelu espoused the idea that blockchain technology will form a major part of the Fourth Industrial Revolution. An excerpt from one of these motions reads:

“Africa was not part of the first, second, and the third industrial revolution & these group of lawmakers believe that the fourth industrial revolution, driven by digital transformation should not pass us by. Hence, the need to engage all stakeholders to initiate the process of blockchain and internet discussions at this time.”

According to Adaelu, blockchain technology also presents another useful solution for Nigeria — and Africa as a whole — in creating trustless protocols in a country said to be beset by institutionalized corruption. Speaking during one of the sessions of the blockchain committee back in July, Adaelu declared:

“Blockchain is for Africa and Africa must take advantage of it to close the gap in the industrial and economic advancement between the African continent and the rest of the world. On the African continent, Nigeria must take the lead as the ‘Giant of Africa.’ The blockchain has the potential to accommodate a smooth transition from the current web systems to a distributed ledger technology for all spheres of any nation’s economy. It is notable that it can extend other currently existing technologies to enhance their data security and efficiency.”

In the last few years, African nations have seemingly looked to China as a model of how a country can rise from poverty to become a global economic power. Even though industrialization has played a pivotal role in China’s growth, several technological constraints as well as shortages of skills seriously hamper Africa’s progress in this regard.

For the likes of Adaelu, blockchain technology offers a means by which can Nigeria and other African nations can quickly bridge the developmental gap. Such a trend could even follow from the recent boom seen in the fintech arena in several parts of the continent.

Percentage spread of fintech companies in Africa

Adaelu also identified how blockchain can help to eradicate corrupt practices in both the public and private sectors of the country. The House member opined to Cointelegraph:

“A trustless society, where the power to decide is taken away from few individuals operating in a central system to a decentralized system, where such decisions are no longer taken by some corrupt individuals to the detriment of the citizens, Such society is evolving through the blockchain technology. Our greatest problem as a people is corruption.  I believe that Africa can completely prevent this if blockchain protocols are implemented in various aspects of our lives.”

Additionally, Kenya is also making efforts to lead the way in blockchain adoption in Africa. Since mid-2018, there have been reports of the government looking to enact regulations for cryptocurrency and blockchain technology in the country.

Recently, a task force on blockchain and artificial intelligence in Kenya submitted a report to the government to consider creating a national digital currency. Additionally, Kenya’s central bank is reportedly in favor of drafting laws to govern initial coin offerings, or ICOs, in the country.

This emerging favorable disposition toward crypto and blockchain technology does not, however, extend to Facebook’s Libra project. The Central Bank of Kenya has previously issued warnings about the dangers of the proposed Libra cryptocurrency.

Blockchain-based PAMs in Nigeria

In July 2019, Nigeria’s road transport union partnered with digital technology firm Blackblock Limited as well as companies involved in insurance and health care to launch a blockchain-based passenger manifest system (PAM). Traveling by road arguably dominates the interstate shuttling scene in Nigeria, as the cheapest interstate airfare in Nigeria often costs more than double the most expensive interstate bus ticket in the country.

A bus ticket from Lagos to Kano (a distance of about 980 kilometers) usually costs between 7,000 to 10,000 Nigerian naira ($20-$30). However, a plane ticket from Lagos to Benin (a distance of about 320 kilometers) can go for as much as 30,000 naira (about $80).

Average prices of plane/bus journeys in Nigeria

Despite the popularity of road transportation in the country, a large portion of the available infrastructure leaves much to be desired. Apart from the poor condition of the nation’s interstate highway system, several other important aspects of traveling by road have suffered neglect.

For one, travelers involved in road traffic accidents along the nation’s interstate highways often find it difficult to receive prompt medical care. Hospitals have been known to refuse admitting victims of accidents because of a lack of proper identification and insurance documents. This trend is despite the fact that there is a law that mandates emergency treatment for automobile accident and gunshot victims.

There is also the matter of the rampant kidnappings that have become a scourge to road travelers in the country. Law enforcement ends up having a difficult time locating the next-of-kin of the victims.

The current paper-based manifest system exacerbates the problems caused by these areas of neglect. The common denominator in many of these cases is the absence of complete passenger information that could prove useful to hospitals and the police.

Blackblock, in collaboration with Universal Insurance and the NURTW, has devised a system to improve PAM using blockchain technology. One of the legacies of government neglect in Nigeria is the disorganization one can often find in bus parks across the country.

The partnership seeks to digitize the PAM system in the country as a way of obtaining accurate passenger information for people traveling by road. The plan is to replace the paper manifest maintained by travel operators with a fully digital system that ensures proper record keeping.

For Najeem Yasin, president of NURTW, blockchain-based PAMs will also help to provide prompt care to accident victims on the highway. The system will also incorporate hospitals and other emergency health care services into the network. Speaking during the official unveiling of the program in Lagos, Yasin declared:

“As you would recall, our desire to ensure a uniform manifest scheme for our members and passengers, especially interstate operators started 10 years ago and we have been working tirelessly with our project consultants and partners to ensure we migrate our current passenger manifest to a more robust, innovative and efficient system.”

In an email to Cointelegraph, Blackblock CEO Ukeme Okuku said the NURTW has been able to take control of more than 2,000 motor parks in Nigeria with the aid of his company’s technical infrastructure. According to Okuku, PAM already has operational coverage for close to 6.2 million trips per month.

Given the digital nature of PAMs, the question of providing assistance for the less tech-savvy road traveler is still relevant. When asked about the steps being taken to simplify the burden for passengers who may not be able to interface with the new technology, Okuku replied:

“Data is being collected via our web application for users that have access to smartphones. While we have short code service that allows users to also use SMS, we also have personnel in every motor park to help with uploading the data collected from the commuters.”

Away from the lofty promises ascribed to blockchain adoption, there are still issues revolving around technological literacy and technical skills shortages in Nigeria and Africa as a whole. Blackblock’s Okuku identified these problems:

“As businesses look at blockchain solutions, they struggle to get started due to the shortage of good blockchain developers in Africa. The demand for software engineers worldwide is growing and the western world is currently taking advantage of the few talents Africa has to offer, making it difficult for local companies to compete.”

Okuku also went further, highlighting the likely problems on the opposite end of the technology spectrum — i.e., the end-users — by writing:

“One of the significant barriers to mainstream adoption in Africa is convenience. ‘If you build it, they will come’ may work in the western world, but it’s an unreliable strategy for deploying solutions in Africa. As Africans we are really attracted to convenience, so a better approach will be to provide a great user experience to promote user adoption to blockchain solutions.”

To this end, some commentators believe that blockchain developers can take a cue from the methods employed by telecommunication service providers in Africa to make DLT-based solutions easy to use for as much of the population as possible.

This is part one of a two-part series on blockchain efforts taking place across Africa.