Charting the way forward in Kenya’s Blockchain adoption

A team tasked with looking into ways Kenya can fully tap emerging technologies to improve service provision, address various challenges and foster economic growth has released its findings.

The report highlights Blockchain and AI as key realms of technology that are bound to fundamentally transform they way things are done in various sectors of the economy.

The Distributed Ledgers Technology (DTL) and Artificial Intelligence (AI) Taskforce, which presented its report to ICT Cabinet Secretary Joe Mucheru last Thursday in Nairobi, also outlined the steps Kenya ought to take in order to play a significant role in the Fourth Industrial Revolution in Africa.

Led by Prof Bitange Ndemo, a former ICT principal secretary and tech expert, the team of 14 came up with 12 recommendations on how Blockchain and AI can be utilised to fight corruption, counterfeits and cybercrime. It also details how the technologies can be tapped to curtail misdiagnosis of diseases, attain food security and strengthen democratics processes.

Further, the 123-page report covers policy and regulatory framework touching on Big Data, 5G and Internet of Things (IoT).

“Blockchain and AI have emerged as technologies that offer actual means to fight corruption and ensure that citizens’ interests are protected, given that they offer transparency and immutability,” the report reads, citing Spain, Ghana, Georgia and Ukraine as countries that have gained tremendous success in using the technologies to fight graft.

To control government’s huge public debt, the report recommends creation of a digital asset framework to enable citizens to raise funds through Initial Coin Offers (ICOs) as a strategy to help local investors put their resources in cryptocurrencies underpinned by the utility of local resources.

“Kenya needs to pilot this promising concept and issue an infrastructure coin or one that deals with the problem of unemployment,” the report says.

Another key recommendation by the taskforce is the use of technology to enhance political democracy and avoid disputes that can degenrate into post- election violence.

“Last year, Sierra Leone became the first country in the world to use blockchain in tallying presidential elections alongside the normal process to demonstrate that indeed Blockchain can be used in tallying votes,” it says.

The report advocates for a gradual adoption of the technology by the Independent Electoral and Boundaries Commission of Kenya (IEBC) starting with election of Members of County Assemblies in order to build confidence before it is ultimately rolled out for presidential vote tallying.

As part of the financial inclusion drive — using India as an example — the taskforce recommends the creation of a National Payment Gateway using a public-private partnership model. This payment gateway becomes the central point for all digital payments. This will ensure, the report says, a reduction in the cost of transactions and the beginning of the journey from a cash-based economy to a full digital economy.

However, for this to happen the government has been advised to conduct awareness campaigns and education to foster citizen’s financial literacy and capability. It will also need to leverage citizen ID for ‘Know Your Customer’ for opening bank accounts and providing credit, establish robust financial consumer protection frameworks and implement a Financial Technology (Fintech) Legal and Regulatory Sandbox.

“To reduce transaction costs, Kenya should leverage Blockchain and AI to identify fraud indicators and conduct a public awareness campaign. It should also introduce legislation to compel financial institutions to report fraud incidents and encourage CBK to leverage Blockchain and AI to verify institutional reporting,” says the report.

State should also use Blockchain to increase transparency of land transactions, calling for reviewing and amending the land title regimes under the Land Registration Act and the Community Land Act to formulate guidelines for electronic land titling.

As the starting point, the taskforce recommends automation of all land records throughout the country.

To improve public service delivery, the team recommends adopting Blockchain to provide “a single source of truth” for all government documents and services. This will be powered by a digital identity service (Huduma Namba) and a digital fiat (surrogate) currency.

The report also covers the all important question of food security and safety, stating that Kenya needs to apply AI and analytics to detect fraud, trace unsafe products and deliver training to farmers to improve quality.

The country also needs to consider distributing farming subsidies, including those for fertiliser, through “a Blockchain controlled Agri-token” that reduces fraud and ensures farmers receive the needed assistance by leveraging citizen ID.

The government, the report says, also needs to introduce a citizen service that tracks the origin of food products and reports those which are unsafe.

The taskforce also recommends aggressive use of technology to improve integrity of medical records, in consent management for greater patient privacy, and in setting up reward systems for patients who avail their data for medical research.

The government, it adds, should tap Blockchain to enable customers trace the supply chain of medication, help tackle counterfeit medication and augment the skills of medical professionals.

To eliminate counterfeits in the wider manufacturing sector, the technologies should be used to create an electronic, interoperable system to identify and trace outputs and inputs as they are distributed in Kenya.

"In reducing cyberthreats, the Computer Misuse and Cybercrimes Act of 2018 should be operationalized and ensure a national computer and cybercrime co-ordination committee is in place together with regularized enforcement."