Disrupting Africa: Strengthening Trust and Combatting Corruption

Technological disruption is transforming markets and societies across Africa. This opens up huge and still largely untapped commercial potential for domestic and international businesses. In my previous articles I’ve talked about the implications of technological disruption in Africa for mainstream and disruptor businesses, as well as for policymakers. How then can technology help in defeating two of Africa’s most salient problems, lack of trust and corruption?

Blockchain as a truth engine

Blockchain technology could hold the key to generating the accurate and comprehensive records of public spending that are essential in stamping out corruption and waste. The technology, where groups of transactions are locked into ‘blocks’ of data to form a chain stretching back to the originator, is distributed around a network of computers as opposed to a single source. This makes it very difficult to tamper with or falsify these records since each computer can see if the original has been altered at all. 

Opportunities and priorities for business

• Businesses have opportunities to develop blockchain solutions bringing together all the stakeholders in both record-keeping and record-usage – this is already being used in the diamond industry for verification and tracing. 

Opportunities and priorities for policymakers:

• Public funds: blockchain technology could provide transparent and tamper-proof records of all public spending down to local authority level, as well as facilitating greater transparency in the public tender process.
• Public sector workforce: an unfalsifiable registry of public sector works could help combat ghost jobs. 
• Public records: Storing information on all citizens from birth and marriage through tax and medical records could improve voting, medical access and also help to combat tax avoidance. People would in turn have full access to all data held on them, helping to tackle falsification and identify fraud. 
• Land registers: The ability to prove ownership, raise finance against it and avoid disputes would all be made possible. 
• ID verification: blockchain records to validate passports, driving licences and to manage biometric identity card systems would significantly improve their trustworthiness.

Case Study: Tracing the diamond back to the mine

Multiple local bodies certify the grade and quality of each mined diamond – but at the moment fraudulent certificates can slip into the system and make it difficult to provide insurance for diamond traders and almost impossible for the police if they seize stolen or lost diamonds and have no idea where they came from. Everledger, a UK company, has developed a blockchain solution combining data from insurance companies, law enforcement agencies and certification houses into a single, unfalsifiable ledger containing all data about each diamond. By bringing together this data, insurers can be confident of diamonds’ value and provenance, while police can use it to discover the origins of diamonds that come into their possession and to identify suspicious transactions and money laundering. The ledger’s global nature, open to all insurers and law enforcement agencies, helps to reveal links in international criminal networks and their sources of funding. 

The way forward

Technology can tackle waste, corruption and tax avoidance on the one side and forge greater trust in public institutions on the other. However, the platforms for making this possible are still far from mature: this presents a challenge for Africa, but also an opportunity to lead the way. 

In my next article, I’ll consider how the digital revolution can help drive improve market access and the ease of doing business in Africa. In the meantime, why not read PwC’s full report on these exciting issues, Disrupting Africa: Riding the wave of the digital revolution.