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GUEST POST by Paul Scott Managing Director at P2 Digital Holdings & Co-Founder at eXtendIT, Xigital & P2DH. Non-Executive Chairman at Whrrl

Paul will return next month to talk about some of the solutions offered by blockchain.

While Blockchain adoption in Africa
is incredibly slow and lags the world by significant margin in all metrics such
as number of projects, funds raised, use cases developed and regulatory
initiatives (the list is exhaustive), the best use cases for Blockchain can be
found on the continent of Africa.

My first world colleagues,
counterparts and connections revel in the stories that I tell them about what
life is like in Africa, and that’s from the relatively privileged position that
I find myself in on the continent.

I ask them to imagine a world where
service delivery failure is the norm, not the exception (up to 90% failure in
many countries) – primarily through government corruption.

A world where alternative payment
systems through mobile airtime have had to become pervasive due to the complete
lack of services for the unbanked and under-banked – to the extent that banking
has become effectively disintermediated by mobile money, where mobile airtime
becomes a medium of exchange and can be used to purchase tens of thousands of
products from thousands of merchants, both formal and informal.

A world where donor funding into
some of the poorest countries in the world has an attrition rate of 85-90%
(yes, the beneficiary sees 15% of the funds IF THEY ARE LUCKY) meaning that
delivery of the absolute necessities in life like healthcare, food, water and
shelter has almost zero chance of being delivered, an issue compounded when
government delivery is non-existent and donor funds are all that can be relied
upon.

A world where the strong man
syndrome
is well entrenched through rigged voting systems that render
term-limits obsolete – constitutional changes are rife and almost unbelievably
universally supported in referendums by 80+% of the population – and big
business drives economies thereby ensuring the almost complete exclusion of small
entrepreneurial endeavours from the market.

Let’s deal with each of these
issues in turn and consider the role the Blockchain industry could play in
enabling the population of the continent to reach their fullest potential.

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  1. Government
    corruption:

The misappropriation of taxpayer
funds in Africa has reached the level of a sport. There are ongoing tax revolts
across the continent where many, varied and highly creative avoidance measures
have been invented by the population due to the complete breakdown of trust in
the government’s ability to deploy funds for the benefit of the population. Taxation
collection and distribution on the Blockchain is the answer, where trust is
immediately rebuilt, ironically through a trustless technology. What could be
more African than this?

  • Payment
    systems:

In most countries other than those
in Southern Africa, banking systems are massively fragmented to this extent:
South Africa, the most advanced country has issued 19 banking licenses, of
which 3 were issued in the last year. Countries in East and West Africa by
comparison have in excess of 40 banking licenses and in some cases as many as
80. The natural result has become a fundamental lack of trust in institutions
that are here today and could be gone tomorrow. This has created the
opportunity for telecommunications providers to disrupt through innovative financing
schemes utilising airtime balances. We know that the largest use case for
Blockchain is financial disruption and this still remains the ideal scenario on
the continent. I know of at least 8 projects that managed to raise some ICO
funding however nothing has transpired, and possible the most advanced of these
has had to wrap up their company due to lack of funds and adoption rates.

  • Donor
    funding:

A donor in the USA can claim a tax deduction
if they donate funds into a an eligible 501(c)(3) regulated fund of up to 60%
of adjusted gross income. These funds gather donations and the select projects
in African (and other emerging) countries. A combination of theft, fraud,
corruption and malfeasance means that up to 90% of the funds are stolen before
reaching the project. Donor funds on-chain would solve this problem in a
heartbeat. All funds are tracked – helping the US IRS too, by the way – and the
donor and fund manager therefore has complete line-of-sight into the projects
that benefit from their donations.

  • Government
    Business

In a blockchain-enabled society,
similar to the way the Estonian government has been set up, there is no possibility
for corruption, stealing an election, misspending taxation or any other means
by which many African governments abuse their populations. I think this is by
far the last of all Blockchain adoptions that will happen in Africa, however
one can dream of the brightest futures!

Blockchain adoption in Africa will
take time, however I am heartened by the number of people who continue to enter
the field, even if only to educate themselves on the benefits and use cases for
the technology. A really great trend in the last year has been the
disconnections between cryptocurrencies and Blockchain. People are finally
seeing the technology for the real benefits, rather than a noble means to a
cynical scam ending.