Blockchain is a buzzword today. While it is still nascent, experts and tech evangelists are talking about how much blockchain will transform the whole world. From education and business to politics and finance and health, blockchain will redefine its operations in the coming years.
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Although, blockchain-powered FinTech companies such as payment service providers, lenders, investment and savings, fundraising and digital currencies exchange exist in Nigeria, there seems to be a love-lost relationship between these FinTechs and traditional banks, and the federal government.
Despite the plethora of importance of blockchain, the federal government of Nigeria is still sceptical about adopting blockchain or stretching its hand of fellowship to FinTech companies.
As a matter of fact, sometime in August 2021, the Nigerian government banned crypto transactions by banks. Earlier on, it had frozen the assets of five crypto trading companies. Nigeria is yet to scratch the surface of the technology.
In this article, I will point out four ways in which the Nigerian economy can benefit if it adopts blockchain technology sooner than earlier.
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Budget Tracking
Blockchain technology which runs on Artificial Intelligence and Big data that reproduce data in real-time, can help in tracking budget spending. Nigeria as a nation, suffers from a budget deficit and corruption. There seems to be a poor tracking of budget spending. The nation has been dubbed as one of the most corrupt countries in the world, ranking 90 out of 115 countries, as recorded in February 2021.
In advanced climes, budget spending is captured detail by detail. On the other hand, there seems to be a padding of budget and shortfalls in expenses in Nigeria. But with a blockchain-based application, we can trace and save transactions and expenditures, which can keep everyone well informed on what the budget spending is.
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Centralized Database
With the rise of insecurity in the country, a centralised database, courtesy of blockchain technology, can help in ameliorating it. Without a centralised database, security operatives might find it very difficult to gather intelligence. With scattered data everywhere or different bio-data for a single person, having effective security can be impossible. With blockchain technology, a centralised database for every citizen and resident can be achieved, because a ledger containing basic legal documents of every citizen with a provision of virtual identity management, can be created using blockchain technology. This process of documentation is called e-identity.
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Financial Inclusion
There seems to be a huge gap in the financial inclusion services in Nigeria, especially in the rural areas. Financial inclusion is one of the factors that spur economic growth, especially when small and medium enterprises, farmers and small business owners in Nigeria can access loans. The concept of mobile money has boosted the economy of various East African economies such as Kenya.
The concept of blockchain is going to eliminate several bottlenecks experienced in the traditional banking sector. With National Identity Number (NIN) and Bank Verification Number (BVN), low-income businesses can sign up for loans without having to go to a physical bank, using distributed network app. For example, the Stellar app, an open-source financial start-up, in partnership with Ordian, launched a blockchain-powered network that can allow Nigerians in rural communities to gain access to affordable direct payments. As of the period, it had over 300,000 users, of which most are rural dwellers.
- Free and Fair Elections.
Blockchain technology will affect the way election is organised, not only in Nigeria, but globally. As known locally and globally, electoral processes in Nigeria is fraught with malpractices and corruption. The problem of rigging continues to be a major impediment to free and fair elections in Nigeria. To earn citizens’ confidence in the electoral process, the Nigerian government must adopt blockchain technology.
With blockchain technology, voters can get to vote with their smartphones. A decentralised record of all votes cast in an election kept on blockchain ledgers cannot be altered or changed without leaving traces of tampering. Where there is no internet access, traditional polling booths with blockchain-powered card readers and electronic voting booths should be provided.
Featured Image Source: Towards Data Science
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