Blockchain WILL solve problems in Africa (and other developing countries)

in #africa8 years ago

There have been a lot of talk in the block industry that the Blockchain and crypto currency will solve many African problems.

If we look a little wider, it is actually a very good solution for developing countries problems. This will be the first in a series of articles which will highlight the actual problems in Africa.


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I have not posted on Steemit for a while, due to a heavy workload at the office for the past few weeks. (As well as research on how to apply the blockchain technology to solve African problems) Those of you in the ITC industry, will know that this time of the year there are generally a hefty spike in requirements from both corporate and government sectors . There are a few reasons for this mainly due to government departments wanting to spend the annual budget before the year end (March) and a lot of companies goes into freeze periods during December, where no changes can be made to any of their systems.

In a new series of posts I will highlight the problems, which most Africans face on a day to day basis. We can then look into ways / solutions to address these problems.

Real world problems in Africa - Cross Border Transacting


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In today's post we will look at the issue of cross border transacting.

Disclaimer: I am not stating all the below as fact and I might have made a few incorrect assumptions. Please feel free to leave a comment

If we look at the USA, we have 50 states using one currency. Similar tax laws, same exchange control.
If we looked at Europe, we have many countries, mostly using the Euro, with a few others.
If we look at Africa, we have 54 countries, using many different currencies. More than 50 to be exact. Each country has its own legal system, own governments, own tax systems, own exchange controls, own constitution, own regulatory systems, well basically their own everything actually.

This is the source of a major dilemma, which are faced by most of the citizens of the countries in Africa. To be honest, it is probably easier to do a cross border transaction between any specific African country and a European or USA company vs doing a transaction between two neighboring African countries.

Migrant Labor


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Let's look at just one real world example. The discovery of gold in South Africa, way back in the 19th century, started the practice of migrant labour, which is still used and practiced today. When we look at the mining industry in South Africa, Zambia, DRC or any mining country today, it is not unusual, to find South African, Kenyan, Zambian and Mozambique residents, working the same shift. Miners, go where the work is.

Now if we look at a Zambian, working in South Africa, we are speaking about a few hundred kilometres drive, but the Zambian resident, will need to go through a multitude of applications which includes Visa's, work permits . I do not have any problem with this, as each country for their own. The problem however is that it is very difficult for the migrant worker to send money back to his home country without massive issues.

Unbanked individuals

I will cover this aspect in a separate post, but most of the migrant workers, are being paid fortnightly in cash. They now need to send the money to their families. What do they do? Well various things:
1. They pay a taxi driver 30% of the money being transferred in a brown envelope, and hope for the best that the taxi driver is not robbed, or dishonest.
2. There are informal money exchanges in the various countries, where the brown envelopes are exchanged.
3. There are the formal money exchanges, like Moneygram, Western Union only to mention a few.
4. Those whom are lucky enough to be banked, can also do the normal transfers through a bank as all of us are used to.

Regulations

Each country has its own financial regulations, which makes it very complicated to transact across border. This results in the opportunity for corruption as there is currently no transparency.

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Travelling between two countries

If you drive across the border between Uganda and Kenya, you will pay with Kenya Shillings on the one side, and pay with Uganda Shillings on the Uganda side. For us travelling across borders on holiday, it is not really an issue, as we do not have to face it every day of our lives. There are people living in Uganda and working in Kenya on a daily basis. Yes sure, you can use US Dollar in most African Countries, but you really lose out in the long term, as when you pay with USD, you will get you change in the local currency, because the USD is high demand for that specific reason.

Senegal,a Western African country, just announced that they are introducing a national digital currency which will be pegged to the CFA Franc, The new currency called eCFA, and will be accepted across a few countries.

You can view the full article here: Senegal to create national digital currency

I will discuss more of the Cross border transacting issue, as I highlight other problems in upcoming posts, these issues are relevant to the specific issue as well as other issues.

Happy Steeming


If you enjoy my articles please follow me on my blog at @jacor

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I have friends who live in Ghana and Camaroon who will find this interesting and practical. 💯👍

Thanks @hexdek16 , please share with them. They might be using the eCFA soon :) I will be highlighting many more issues in my upcoming posts. Chat soon

Thanks for this Information. See also http://coinwelt.de/2016/08/un-sucht-freiwillige-fuer-einfuehrung-von-bitcoin-in-afrika/
(unfortunately in German) means The UN is searching for volunteers to introduce bitcoin in africa.

Hi @freiheit50 , I will definitely have a look. Thanks for the comment.

Ps: I assume Freiheit means Freedom in English? It is Vryheid in Afrikaans :) Pronounced Frei-Heit :)

Yes you are right! Are you resident in South Africa? Do you know @onetree?

I am indeed a resident in South Africa. I have met @onetree via comments on the platform. How do you know each other?

Great , we are starting to build a great Steemit community from South Africa. We recently arranged the first Steem Saturday in Johannesburg. It was a great event. Did you see the pictures?
https://steemit.com/steem-saturday/@naomi.louise/steem-saturday-was-a-blast

Nice to see this! Steem on!

Consider yourself followed :) Steem On!

they have mpesa too...

Indeed, a very good system for trading, but the users are paying a massive premium. I need to check the figures again, but it is VERY expensive to use.

mpesa? I think you got wrong information about costs....

Glad to see you are back @jacor!

Thank you very much @giantbear :)

Blockchain networks like Steemit and Bitland may soon unlock the greatest third world improvement and economic progress in human history!! We just need to keep refining the tools and building.

Hi @benjojo, thanks for the comment. I fully agree with you. I have looked at Bitland before. I am working with our local Land Restitution department in a non-block chain capacity. I have mentioned the block chain before but did not have a positive response yet. It is however definetly a very good solution to yet another African problem. Would love to know more about the project if you are involved in any way?

My only involvement was contributing some funds and keeping abreast of their progress. I dearly hope the project is a success so that the African people can have a stable record of land ownership. As I understand it, Bitland are doing a trial in Ghana with plans to expand across the African continent and other continents. One key element is ensuring a stable power grid...I think solar powered hubs will be used as the backbone to a widespread power grid. The last I heard they were moving ahead with great promise.

I can really see here how cryptocurrencies could solve most issues mentioned in your post. But how is Africa connected?

Africa has a very large Smart Phone penetration which makes it the perfect medium for Blockchain and crypto currency technologies. I have also recently read about a new Satellite which will cover the whole of Africa.

That's great. Then you have everything ready to really make it :)