Blockchain technology to spur economic growth in the counties

By Leonard Wakoli

Blockchain technology was originally developed as the accounting method for crypto currency (the virtual currency Bitcoin). This technology is also referred to as the as Distributed Ledger Technology (DLT) and it allows for fast, secure and transparent peer-to-peer transfer of digital goods including money and intellectual property.

A survey across the Kenyan populace, particularly at the county level, shows that people are not aware of this technology and yet it is close to a decade old.  However, the technology is slowly but surely gaining prominence in lower-middle income countries like Kenya.  For example, the Blockchain Association of Kenya is a registered entity, a government formed Blockchain Task Force headed by Bitange Ndemo, as well as incubator called BitHub, founded by John Karanga and Metta, an entrepreneur Hub that has of recent, doubled as a meeting space of Blockchain related conversations.  This technology when harnessed and implemented will help to solve some our countries most difficult social issues especially at the county level.

Why use Blockchain?

Efficiencies resulting from Blockchain automatically yields to impressive cost savings.  This is because Blockchain makes it possible for governments and organisations, including banks to streamline internal operations, thus dramatically reducing expenses, errors, and delays caused by traditional methods for reconciliation of records.  Those who have adopted Blockchain technology have realised benefits in three areas: First, nearly fully automated Blockchain instituted systems result in far fewer errors and the elimination of repetitive confirmation steps.  Second, electronic ledgers are much cheaper to maintain than traditional accounting systems. The employee headcount in back offices can be greatly reduced and finally, less capital being held against the risks of pending transactions which is as a result of minimising the processing delays.  Additionally, greater transparency and ease of auditing should lead to savings and could put a damper on the millions of shillings lost to corruption.  Furthermore, Blockchain eliminates human involvement in processing is particularly beneficial in cross-border trading, which usually take much longer because of time-zone issues and the fact that all parties must confirm payment processing.  Blockchain systems can set up smart contracts or payments triggered when certain conditions are met. For example, a Blockchain Forex Bureau transaction can use a smart contract that automatically makes currency conversions when a traveler reaches their destination with no human interaction.

The fact is that there are limitless possibilities for its implementation since the underlying technology can be leveraged in virtually any field such as crop trade, water, security, education, health and a host of other areas in need of resolution.

Blockchain and the vulnerable farmer

To take a deeper dive into the implications Blockchain could have on agriculture, any farmer understands that the business of sharecropping is a highly risky and volatile venture – particularly when that farmer is dependent on rain-fed agriculture.  In 2017 for example, most farmers in Kenya, particularly the Northern part of the Rift Valley recorded heavy losses in their farm yields due to prolonged drought.  In as much as irrigation sufficiently addresses this issue, there are many other challenges facing farmer. The most urgent issue is lack of access to the market supply chain.  This can be solved through crop certifications using Blockchain that can take out some of the guesswork related to the harvesting logistics.

Crop certifications ensure that the producer can enter the brand, strain, supplier and date upon which planting took place.  This would be the first block for that year’s production chart for a given field.  Each application of water, fertilizer, herbicide, or pesticide can be recorded along with the volume per acre.  This Blockchain could further be extended through processing and manufacturing of food products using the produced crops so that a food product manufacturer can demonstrate to consumers that their products meet the certification requirements from farm to table.  This technology would not only be disruptive, it would also eliminate the extraneous, and often contemptuous middle man by using crop certifications that would be connected directly to field computers and sensors so the producer can populate data blocks automatically with little effort.  Thus the end user locally or aboard would be able to purchase the yield directly from the farmer based on the crop certifications.  Further adaption would include the implementation of crypto currencies like Bitcoin and Ethereum for accounts payable and receivable functions.

The youth agenda and Blockchain

It is difficult to have a conversation around Blockchain technology without including the benefit it could have on youth.  In Korea for example, children in middle grade school begin to learn about technology, they even learn how to build mechanical robots.  The growing number of youth unemployment is becoming a national disaster that warrants immediate attention both from the national and county governments.  While our education is under new leadership and making strides, a robust technology curriculum must be a component of education for all grades.  Studies have shown children that are taught to be innovators of technology as opposed to consumers of technology fare much better in their careers.  The pedagogy of Blockchain could also be an element of reducing numbers of unemployment among the youth.  There is a shortage of Blockchain developers throughout the whole world and particularly Africa, yet the demand for them is very high. The Bungoma County government is looking to create spaces that help to cultivate and nurture tech youth hubs.  We are working on centers that will expose youth to Blockchain coding languages like, C++, Python, JavaScript and Solidity.  These skills will inevitably increase their career options across the world.  This is also a selfless endeavor, as many of the youth will now be equipped with the technological know-how to improve issues in Bungoma around water security, energy, land registration, security of examinations, elections and a plethora of other county issues.

Challenges in Adopting Blockchain Technology

Besides technical challenges such as not having sufficient experts to develop Blockchain technology based platforms, there remains a school of thought that Blockchain and the derivatives of Blockchain are a Ponzi scheme, a fad that will soon fall to the wayside.  There are also observers that believe Blockchain technology should be regulated and monitored.  Blockchain was created as a self-monitoring eco-system that looked to free itself from the brick and mortar habits that led to the 2007 recession in the United States.  The premise of the technology was created out of frustration of a failing and seemingly corrupt banking system and government that awarded multi millionaires for their bad deeds and left the American taxpayer to pay the ultimate price.  Blockchain and its poster child Crypto Currency Bitcoin was developed to shed the traditional way of banking, eliminate corruption and create a system where people monitor people.

In short, Blockchain regulates itself through the encrypting information, information that is checked on a Blockchain from people around the world and regulatory measures only hamper its growth and usability. With the National Government’s focus on Blockchain technology, we expect to have national engagement dialogue on the technology. To keep our flag high as one of the technological advanced countries in Africa, I hope that we are nimble and able enough to get ahead of the curve and not be colonized by it.

The writer is the County ICT Director – County Government of Bungoma and Cyber security Researcher at Jaramogi Odinga University of Science and Technology (Bondo – Kenya) and Kibabii University (Bungoma – Kenya)