Humans, regardless of the level of their economic development are constantly transferring value, as they continue to seek trustworthy intermediaries to depend on. Block-chain technology provides such secure transactional efficiency for value transfers.
Block chain technology, a virtual financial environment where transactions are recorded in a verifiable, secure, transparent and permanent manner without a third party control, is one that has gained huge global attention lately. From the launch of its crypto-currency invention (bit-coin) which is one of the most successful virtual currencies with a capital market estimate of 10 billion dollars in 2016 and huge venture funding, numerous block-chain applications have been developed and many more are still in the works.
However, despite its current state as one of the world’s ‘hottest’ technologies, with vast financial transactions globally, the massive potentials of the technology are yet to be explored in most developing countries such as Nigeria, where such virtual currencies are not considered legal tenders. Nevertheless beyond bit-coin, other applications of block-chain technology, if properly implemented could help improve our nation’s economy.
Block chain has been mooted to be beneficial in agriculture, education, healthcare, protection of personal data, land management, laws, governance, energy, supply chain, and insurance sectors, recently. By creating an ever-growing data that cannot be altered retroactively, block-chain provides health care and life science sectors the opportunity to use distributed health database, where a number of stakeholders interact on a regular basis and share health data to help reduce the errors of manual data and a high risk of disagreement over liability, particularly on “who did what and when.” One of the most influential effects of such adoption will be to provide patients with control over their own health data.
Mischa Tripoli, an economist, posits that the disintermediation of transactions in agricultural supply chains; and the use of smart contracts through the block-chain technology, enables friction-less and real-time payments for agricultural financial services, which can reduce transaction costs, decrease risk for buyers and sellers and increase cash flow and working capital for farmers and sellers which is usually tied up in a paper-heavy settlement processes. This is visible in many African countries, for example in Ethiopia, where block-chain technology is used to track the supply chain of coffee exports, and in Uganda where the government makes use of this technology to improve service delivery.
In Nigeria, two major areas block-chain technology can be valuable is through budget tracking and credible elections. No doubt corruption is the origin of most of the challenges that has reduced our society and economy despite our enormous natural and human resource potentials.
World Bank reveals that developing countries like Nigeria lose about forty billion dollars in government assets. Reports show that 25% of Africa’s average GDP is lost to corruption every year. In the 2017 Open Budget Index (OBI) survey released in February, Nigeria scored 17%, ranking 90th out of 115 countries globally, and 23rd out of 38 African countries.
This problem was perhaps the reason Malam Nuhu Ribadu, pioneer Chairman of EFCC, stressed the need for disruptive technologies to tackle corruption in the nation.
Block-chain technology can be applied in the development of budget-related mechanism where transactions and expenditures can be tracked, which will in turn eliminate embezzlement of funds as transaction amount, time, account number and receiver will all be under public scrutiny.
In the same vein, the adoption of this technology in our electoral system is imperative, due to electoral violence, ballot box theft, illegal voting as well as manipulation of votes, especially judging from the just concluded elections in the country.
Block-chain technology offers potential opportunity for free, fair and credible election to be conducted, in which the decentralized record of all votes kept in its ledger cannot be altered without trace. This is achievable through casting of votes via smart phones, which will in-turn reduce the stress of going to poll centers to vote. The essence of this cannot be over-emphasized because free and fair elections are one of the pillars of healthy democracies.
Sierra Leone made a global record when it adopted this technology during its election in 2018. Using a block-chain application developed by Agora, a Switzerland-based company, it was able to track and collate votes which according to Mike Orcutt “was a step in the right direction” to fight against voter fraud in order to achieve election transparency.
Countries like Japan, Switzerland, the United States and other advocates of block-chain believe that the technology can bring a new level of transparency, fairness, and efficiency to the electoral process.
It is imperative to note that for over a decade, Nigeria has clamoured for a cashless economy, where all purchases are made by credit cards, charge cards, cheques, or direct transfers from one account to another through mobile banking platforms, this policy hasn’t been totally successful. Nevertheless, it is believed that block-chain technology can in addition, play an instrumental role in making this dream a reality.
Jim Rogers, a renowned investor said “block-chain is changing everything we know and because Africa is coming straight to it, it will instantly change everything we do. It’s a reality already”. Technology has the power to reshape Africa by unlinking the millions across the continent who have no access to information and financial services, and Nigeria cannot afford to remain in the sideline.
No doubt, the opportunities block-chain technology offers for economic revolution are enormous, and can flip the charts in terms of infrastructural development if its potentials are embraced. It is therefore necessary that we explore ways to improve our economy and fast-track our growth and development indicators through the promotion of new policies and regulations that allow for block-chain innovation.