How Africa can immensely benefit from blockchain technology

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by Lumai Mubanga

Counterfeits, shelf life and product origin are challenges blockchain helps to eliminate

Of all the continents in the world, Africa seems to the least developed. The reasons among others include historical colonial enslavements, bad governance, higher levels of corruption among government leaders and most importantly, lack of technological infrastructure development, adoption and human resource scarcity.
Coupled with the above are three main areas that thrive in such situations. The first one is the lack of transparency in tracing end to end the available supply chains on the continent. Secondly, Africa has received its share of counterfeit products from unscrupulous manufacturers and middlemen whose products have affected millions of lives who depend on these fake products. The third one is the inability to track the original life span of products on the shelves. These include medicines, foodstuffs and other edibles. Millions have consumed expired foods only to end up consuming either fake or expired medication, resulting in immense suffering and death.
With the coming of blockchain technology, most of these serious challenges can be solved or at least minimised if blockchain is adopted as soon as possible. But how does blockchain technology help with these challenges?

End to end transparency

A lack of end to end transparency has allowed insurance companies to charge transporters a blanket fee on their merchandise regardless of the contents in the containers. Many SMEs have been unable to obtain adequate financing from banks and other financing institutions. For example, if a transporter has two containers, one carrying and emeralds and the other one carrying bond papers, the probability is that the transporter will be charged the same insurance premium for all containers. One reason is that insurance charges are based on how safe or risky the route is minus having the knowledge of the contents being shipped.
However, blockchain with its ability to promote transparency, insurance can charge you a much more reasonable premium. That will mean a lower cost for SMEs. This, in turn, will allow SMEs to have a much higher financing rate and higher production capacities. The direct economic benefits will help many African entrepreneurs to succeed and reduce poverty.

Counterfeit products

There is no limit to the number and types of counterfeit products reaching the African continent. From foods stuff, medicines and electrical appliances. According to one report released in 2015 as released on the esi-africa.com/ website, counterfeiting of electrical products occurs in 40% to 80% of African markets. This has resulted in blocking the potential of African entrepreneurs who have genuine products that could not compete with these cheap counterfeit products from other countries.
Blockchain will help solve this challenge in all areas. For example, blockchain has the capacity to enforce supply chain traceability. In simple terms, this blockchain capability will enforce the fight against counterfeit products, be it foodstuffs, electrical products and others. These can be traced back to their original manufacturers and authenticate whether they are original or not. With such mechanisms in place, it will allow SMEs in Africa to have a level playing field with imported merchandise.
Another angle from which blockchain will benefit African countries more especially is in proving product sustainability. The classic example is the sustainability of procuring the so-called black diamonds. Such diamonds tainted with blood can be prevented from leaving the continent and mechanisms can be put in place to recover them to the state. Palm oil and wines are also among the most counterfeited products. Blockchain technology will allow all these to be checked and allow African countries to increase internal production and curb externalization of profits.

The shelf life of products

There are many reports of customers buying expired products and drugs. In many cases, the expiry dates of these products are either tempered with, changing the original dates to keep them on the shelves longer and increase the possibility of selling them. Unfortunately, most consumers do not bother to check the status of these products. The results have been unhealthy populations.
And again, blockchain has the capability to ensure that product dates are not tempered with. Any changes that can be made can easily to detected.

All said Africa stands to benefit from this technology in many ways. As stated above, end to end transparency of product traceability, counterfeit products and the shelf life of products in the markets will be improved and sustained. Results will directly translate into improved economic activities, profitability and lower levels of poverty. How long it will take for Africa to adopt this technology remains a pipe dream.

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