E-Government Solutions for the Developing World: Reducing Fraud and Increasing Revenue Through Blockchain Technology

Fraud is a major problem for just about any company or organization in the business world today. According to most fraud regulators, the prevalence of fraud is currently at epic proportions. The Association of Certified Fraud Examiners have recently gone on the record to state that most businesses lose about 5 percent of their total revenue on an annual basis. 

At first glance, five percent may not seem like a lot, but depending on how much money your company makes, it can certainly start adding up over time. Fortunately, the innovation in cybersecurity known as “blockchain” promises to completely eliminate that loss in the very near future. 

Blockchain Technology Explained

What is blockchain you might ask? Blockchain is essentially a kind of distributed digital ledger which records transactional information through what is known as a “peer to peer network.” 

You may have heard of blockchain in regard to Bitcoin. It was the blockchain that worked to ensure the validity of financial transactions with that particular piece of cryptocurrency; ensuring that double, or even fraudulent transactions did not take place. 

The beauty of the blockchain is that it runs on a completely decentralized network. Like an assembly line, one node on the network sends transactional information to the next node until a transaction is complete. There is no central point of reference since several nodes are working in tandem with each other. Whereas in more traditional transactions there is usually a central point of administration, which if compromised can leave the whole entire system vulnerable.

With the blockchain however, there is no sole authority since the chain of data is spread across the network. This means that there is no centralized point in the system that a potential fraudster could exploit. With the blockchain all transactions are completely transparent and seen by the entire network, there is virtually no way for someone to tamper with the data since it would not mesh with the rest of the chain.

Everyone involved on the network can clearly see the entire history of transactions, so anything that wasn’t legitimate would immediately stand out like a sore thumb. Everything is time-stamped and locked in a tamper-proof block on the chain. If someone tried to change information after the fact, it would be immediately apparent.

And due to the nature of blockchain, even attempting such a thing is a near impossibility. Impossible due to the fact that the only way to subvert the system in this manner would be for an individual to somehow gain control of a majority of the chain. Someone would have to control at least 51 % of all nodes on the network—a feat which is most likely never going to happen.

Blockchain is a Perfect Suitor for Developing Countries

It is this rock-solid, immutability of the blockchain that presents a great boon for developing countries. Since when placed upon this foundational bulwark, log jammed local bureaucracy and the potential for corruption, can be completely leapfrogged over by implementation of the digital ledger that the blockchain provides. 

This has already shown promise in the area of e-government services and agriculture, with some Companies such as Domineum.io using the blockchain to keep track on real estate and cargo containers.

Domineum is touted as one of the first “non-cryptocurrency blockchain application” and with good reason. Domineum has recently had a string of stunning success when it comes to the facilitation of e-government services around the world. As was recently demonstrated when Domineum partnered with the Sierra Leone Government through the Sierra Leone Port Authority to keep track of all cargos/containers coming in and going out of the Country, as well as supporting with the Abia State Government Real Estate/ purpose clause protocol.

Likewise, other organizations and countries are using blockchain for tracking of food production. Through the blockchain an agricultural commodity such as corn for example, can be tracked from its initial harvest, to when it was put on the market, all the way to its eventual purchase by the consumer. 

If there was ever a problem with that said corn—if for example there was some kind of outbreak of plant borne e-coli—it wouldn’t be a mystery to figure out where the e-coli came from. It’s all automatically recorded right there in the blockchain’s public ledger. 

Blockchain can also provide a boon for the individual farmer. Normally, the average farmer would have to go through several other individuals just to get their goods to the market. Blockchain eliminates all of that. 

Blockchain Makes Accountability Easy

No longer will anyone be able to falsely or inflate food prices in order to line their own pockets. Blockchain provides immediate accountability when it comes to any and all revenue produced. It is the network of blockchain itself that facilitates a fair and equitable arrangement for both the producer, and the ultimate consumer of agricultural goods. Blockchain provides a bridge in markets where previously, more traditional infrastructure may have been lacking. 

Developing regions of Africa for example, have seen this dramatic shift first hand over the past decade. Ever since phones became commonplace in this part of the world, it has allowed for transactions to be conducted with a little something called “cash convertible phone credits.” What does that mean? It means that someone without a traditional bank account can still send funds electronically over the internet by use of phones and more importantly; through a blockchain based network. 

To see this process at work, one has to look no further than the nation of Zambia. Here indigenous farming has been a long-held tradition, but the practice is often stifled by corrupt and bloated bureaucracy on the ground. With blockchain utilized as an e-government solution however, Zambian farmers have a direct outlet with which to market their products. 

This vital lifeline is important, because in the not so distant past, these farmers had to rely upon expensive and ineffective intermediaries just to get their products out to the marketplace. But now thanks to this new innovation in blockchain tech—all of that has changed. Now these farmers can benefit from what had been termed, “Near-Zero Transaction Costs.” 

There is no bank or any other intermediary involved. Through the digital ledger of blockchain—without farmers supplying even so much as a bank account—Businesses and individuals can track transactions in real time. Through the power of smartphones, the blockchain, and platforms, local African farmers are able to bypass more traditional methods, and sell their produce directly.

But as great as all this is, farming certainly isn’t the only area of life in which the developing world could benefit from blockchain. There are also great benefits that can be gleaned in infrastructure and transport. Such a statement might seem confusing at first. One might wonder—how would a digital platform help physical infrastructure? Will the blockchain pave roads and lay down railroad track?

Blockchain is a Versatile Tool for Development

Blockchain of course, can’t directly build infrastructure, but it can indeed better manage any infrastructure already in place. Nigeria for example, is currently set to be a primary beneficiary of this process at work. Since the summer of 2019, Nigeria’s NURTW (Nigeria Union of Road Transport Workers) has begun a partnership with “Blockchain Limited” in order to create a brand-new passenger manifest system run exclusively through the blockchain. 

This blockchain based system is set to create an immutable, digital record of all transactions conducted on Nigeria’s roads. This means that every traffic ticket handed out, every car crash report submitted, and every complaint about a pothole, will be permanently lodged within the confines of this digital ledger—and no one will be able to alter, change, fabricate, or omit any of it. Every transaction will be there for everyone to see. 

So powerful is the potential in fact, that the benefits of the blockchain as it pertains to such e-government solutions, was recently brought up before Nigeria’s House of Representatives. The matter was championed by house member, Mr. Solomon Adaelu who claims that it is in Nigeria’s best interest to not let blockchain technology pass them by. Mr. Adaelu insists that blockchain presents the best way for Nigeria to combat institutionalized corruption. 

Adaelu puts it this way: 

Nigeria needs a trustless society where the power to decide is taken away from a few individuals operating in a central system to a decentralized system, where such decisions are no longer taken by some corrupt individuals to the detriment of the citizens. 

He also maintains that “…Our greatest problem as a people is corruption…[and believes that] Africa can completely prevent this if blockchain protocols are implemented in various aspects of our lives.”

Nigeria is coming to realize the kind of lifeline that blockchain can offer when corrupt bureaucracy fails. Reducing fraud and increasing revenue through blockchain technology now seems within reach. If the trend continues, it presents a true revolution for the developing world.


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