Blockchain technology is naturally suited for a developing region like Africa. While most of its use cases have been focused on finance, the technology possesses a lot of potentials to transform Africa. For a continent with 54 countries, Africa has a lacking financial infrastructure for which blockchain technology seems to be a potent potion. However, with the introduction of Decentralised Finance (DeFi), there seems to be a wider range to the use of the decentralized technology beyond cryptocurrencies and payments. There is more to the decentralized technology and this brings us to the introduction of the Decentralised Ecosystem (DeCo).
The African financial landscape is small compared to its counterpart from other regions. Factors such as the worsening state of inflation, remittance fees, low financial inclusion, political stability among other factors, have made things difficult for the average person in sub-Saharan Africa. With inflation being about the most dominant of all threats, the Inflation rates across the continent as a whole have historically been much higher than the global average. An extreme example would be Zimbabwe’s hyperinflation which led Zimbabweans into a desperate search for a store of value even as the pandemic has increased economic uncertainties.
Also, since the continent also has to battle corrupt government officials and unfavourable policies, it means that in every sector, the elites and those at the helms of power enjoy better privileges than the masses.
So what Exactly is the DeCo?
It’s not just about decentralising finance anymore, it’s about creating decentralised economies, communities and ecosystems. DeCo aims to fix the flaws within the DeFi system by creating a system where autonomy is removed from the central and distributed within a community. For instance, if the health care system becomes decentralized, financing research and health processes will become faster and remove autonomy from the hands of those who want to control resources solely for themselves. DeCo aims to bring about the mass building of communities on the blockchain, decentralising supply chain and killing monopolies across communities and sectors.
What Blockchain Can do for Africa
There are numerous use cases the blockchain can be applied to in Africa. Currently, 51% of Africans own a smartphone and this is the minimum requirement to get access to the blockchain. Africa is highly dependent on mortar and brick as well as paper documentation and this makes simple processes more complicated. For instance, to get your documents transferred from one hospital to another, you have to go through rigorous processes of paper trails. However, with a decentralized system, the patient has all their details stored on the blockchain and can give access to the doctors.
The use case of the blockchain also extends to governmental policies and budgeting. Utilising the blockchain in governmental financing, tracking corrupt politicians will become easier and this way financial waste can be curbed. The blockchain technology can be used in the following ways in Africa
- Banking and cross border payments
- Supply chain tracking in raw material industry and farming
- Election and budgeting
- Identity and land records
- Medical data sharing
- Insurance and crowdfunding
- Animal tracking to preserve endangered species.
- Legal documentation and Decentralised jury system
Blockchain has a wide range of use cases in Africa. However, one of the questions that beg to be answered is its sustainability. How sustainable is the blockchain in Africa? Currently, several blockchains are beginning to look into the use of DeCo. As it is, DappTricity is building Dapps for small communities and ecosystems to use across the world. A Decentralised economy will enable users to spend less on transactions and have easy access to supply. However, it may take a while for this dream to be achieved.
There are several constraints to the use of the blockchain in Africa. For instance, the issues of regulation and education. The African regulatory landscape makes it difficult to implement some decentralised solutions. Furthermore, the end-users do not understand the benefit and use of the Decentralised Ecosystem. This is because they have transferred the distrust of the centralised system to the decentralised systems. However, countries such as Rwanda, Uganda, South Africa, Nigeria and several other African countries are opening their borders to blockchain technology.