Kenya braces for blockchain revolution

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On the African technology map, Kenya holds a unique position. Not only does Kenya have far more advanced technology sectors than other African countries, it boasts a high internet penetration rate of about 90%. Kenya is also home to innovative projects such as M-Pesa that made Kenyans pioneers in mobile payments.

It is no secret then that Kenya’s preparedness to blockchain revolution comes to critical focus even as the rest of the world remains actively engaged in this disruptive technology.

Kenya is also seeing economic progress and regional integration, especially with its East African neighbours and the rest of Africa. There can never be a better time for the country to take advantage of the opportunities arising from blockchain technology.  

Blockchain has already evidenced its potential to disrupt every sector and usher in new ways of doing business. It can be applied in any process that lacks trust and demands transparency including sectors like education, health, supply chain, lands, banking, and cross-border trade.

According to the World Economic Forum, 10 percent of the global GDP will be stored on the blockchain and blockchain-related technologies by 2025. Developed countries understand this, which is why nations such as China and Australia are developing national roadmaps to ramp up innovation through blockchain. Kenya, and by extension Africa, must not be left behind.

Key use cases

Kenya’s very specific challenges and its young and fast-growing population are the key reasons why the country needs blockchain. Rampant corruption in the public sector means that millions of shillings are misappropriated every year. Kenyans are also not receiving the services they need whether it is infrastructure development, quality health care or streamlined government services. But these challenges could prove to be opportunities with blockchain implementation.

The Blockchain and Artificial Intelligence Taskforce presented a report last year that identified key areas where the government can apply this technology. One of the critical use cases is the creation of a national payment gateway based on blockchain for all digital payments that include mobile, ATMs and banks. This system would allow Kenyans to send and receive money around the country at minimal costs, further enabling financial inclusion. It is also on this platform that the Central Bank of Kenya can decentralise funds allocated to county governments and monitor their use in real-time.

Kenya also has a better chance of addressing runaway corruption in the public sector by leveraging blockchain for various government services. In the Lands Ministry, for example, blockchain provides a Single Source of Truth (SSOT) regarding land ownership and transfer of property, and this makes it possible for anyone to validate such transactions. This will end land grabbing and fraud in Kenya.

How’s Kenya preparing for blockchain revolution?

Does Kenya have the potential to lead the way on blockchain adoption?

Prof Bitange Ndemo thinks so. The chairperson of the Blockchain and Artificial Intelligence Taskforce and an associate professor at the University of Nairobi’s School of Business, Prof Ndemo likens the growth of blockchain to that of the internet in the 19990s.

“When the internet was launched in the 1990s, people across the world were hesitant to believe its potential in changing lives. Some complained of the cost and scalability”, Prof Ndemo told Daily Nation.

“But with time, the internet became exceedingly revolutionary and everybody embraced it. It is the same case with Blockchain.”

Gartner, a leading advisory firm, predicts that the full potential of blockchain technology will not be unlocked until around 2023. Kenya’s blockchain ecosystem will experience some hurdles but eventual adoption by all sectors is inevitable, said Prof Ndemo.

In Kenya, there’s a lot of activity to increase the awareness of blockchain and cryptocurrencies across the country. Several organisations, including the Blockchain Association of Kenya, Aeternity Hub Africa, BitHub Africa, among others, have come up to educate Kenyans about this emerging technology.

 “We are gradually gaining more following in this field. Nowadays we have more people coming to our free training events”, said Roseline Gicira, Chairperson of the Blockchain Association of Kenya, which was founded in 2017.

“We have blockchain meet-ups every week to spread the gospel in Nairobi.”

What will it take?

Experts say the key hindrances to the adoption of the fourth industrial revolution (4IR) technologies in Africa are a deep lack in digital skills, coherent leadership, and basic infrastructure. Taking the basic steps toward a digital transformation is crucial for putting Kenya on the global technology map. Organisations such as Aeternity Hub Africa are aiming to bridge this gap while the government is being urged to secure investments in basic infrastructure.

Aeternity Hub Africa provides blockchain training programs in Nairobi, helping young people to train and get the necessary skills for building blockchain applications. They also work with companies in identifying suitable use cases for blockchain in business operations.

“We are driving the adoption of blockchain in Africa through corporate trainings, educational programs, workshops and boot camps. We train software developers on best practices for building decentralised applications”, said Mr. Frank Deya, COO of Aeternity Hub Africa.

Blockchain courses are also being offered at Moringa School and Kwakoo Academy. These technology hubs offer students regular blockchain training and 21st-century skills that help to prepare them for the jobs of the decade.

Kenyan projects to meet Kenyan needs

Already many stakeholders in the Kenyan technology space view blockchain as key to fixing several issues the country faces. From boosting agricultural yields to securing Huduma Namba and establishing land rights in Kenya, the possibilities are endless. Twiga Foods, for instance, is a Kenyan-based startup that leverages IBM’s blockchain solution to source fruits and vegetables from farmers across the country. This not only gives farmers the convenience of accessing a ready market for their produce, Twiga also makes it possible for them to secure loans for their businesses.

Kenya’s startup scene is thriving, and the industry is optimistic that through continued government support, every sector will embrace blockchain technology.

“We are happy that the Ministry of Information, Communication and Technology is giving this tech space sufficient support. Once this technology matures, the debate about whether the country is ready will end. It is ubiquitous and its use will be everywhere to weed out corruption and other social vices,” said Prof Ndemo.

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About the author

Vincent Olago

Vincent Olago

Vincent Olago is the Managing Editor of Ledger Africa and has been active in the blockchain space for three years now. He's passionate about entrepreneurship and the potential of disruptive blockchain technologies to reshape our world. He supports startups to tackle blockchain challenges, address strategic problems and optimize growth.