Harnessing the blockchain to rejuvenate Africa’s developing markets
Entrepreneurs love problems – solving them through innovative business models and the application of new ideas and technologies.
Never has the advancements of new technology been more pertinent in solving social issues than in Africa. With 54 countries spread over the world’s second largest land-mass, an estimated 1.1 billion inhabitants speaking more than 3,000 languages, Africa is a largely fragmented continent, making the implementation of traditional infrastructure near impossible and hindering growth.
Instead, many African entrepreneurs have found their niche in the alternative infrastructure provided by mass internet and mobile phone saturation, using such technologies to close geographical gaps.
One huge problem in developing markets relates to property rights and land ownership. In Ghana, this becomes immediately apparent when driving around Accra. Commonly painted onto the sides of houses is the phrase: “This land is NOT for sale”.
There are fundamental weaknesses within the property land registration process in Ghana. The Ghana Lands Commission (GLC) consists of four sub-divisions operating without any central database that would enable them to share information. Furthermore, all property related data is held on paper and is not digitalised. Not only does this system lead to long delays when registering legal titles (it is hard to track ownership legacies), it’s also highly susceptible to corruption. A common problem is the forgery of ownership documents to sell land a person does not own. It can take up to two years to register a new legal owner with the GLC, by which time the fraudsters are long gone, leaving the new “owner” tied to a mortgage obligation for a property they have no legal rights over.
Furthermore, those looking to legally purchase land are severely limited when securing loans from financial institutions, as correct legal ownership cannot easily be determined, severely impacting on the development of local industry and society.
It’s problems like this that entrepreneurs hope to solve, harnessing new technologies such as blockchain.
BenBen aims to eradicate the problem of land and property fraud by providing a transparent, secure online platform through which civilians, governments and financiers can search for information on, monitor and purchase property or land.
Blockchain supports this idea. To put it very simply, Blockchain is a database – albeit an extremely high functioning, complex one, which manages, stores and distributes information between users. BenBen aims to connect all parties within a property transaction; the bank, the buyer, the seller and the GLC, providing a central resource to access all relevant records (mortgage deeds, credit ratings etc.) instantaneously. The system combats fraud by building a traceable history of land ownership and exchange, and helps to eradicate the current hold-ups in registering property titles, assigning new legal ownership and ultimately the release of funds by negating the need for each stakeholder to create their own separate online archives. This provides both an economic and effective solution.
The social implications behind effectively establishing property ownership in developing countries can reduce conflict and property litigation. Banks will become more willing to lend against properties with correct legal titles, and will be encouraged to release more cash as mortgage products. People who would otherwise not have be able to secure a mortgage will ultimately become eligible. And digitally secured assets (in the form of houses) increase in value by benefitting from clean legal titles.
One central tenant of Blockchain technology, transparency, may not necessarily work for all those positioned within the property lending supply chain. This is where we as entrepreneurs need to understand the benefits of what this technology can do within the realities of the surrounding cultural environment. One is reminded of the quote from Professor Bill Aulet at MIT: “Culture eats strategy for breakfast and technology for lunch“.
For local entrepreneurs such as my colleagues Emmanuel Noah and Daniel Bloch, the co-founders of BenBen, though they understood the local market challenges to their business, they also need to be supported by the business skills necessary to build a robust business plan. I enrolled on the MBA programme at Imperial College Business School in the UK, and the skills I learned - finance, strategy and business modelling - meant I was able to create accurate financial projections for the company that have been relied on by our investors.
I also was able to develop relationships with faculty who have help us navigate the Blockchain landscape. Coming back to Ghana, this network has been vital. We are privileged to have faculty from the Imperial College Centre for Cryptocurrency Research as our technical Advisory Board members, helping to further refine and develop BenBen’s operations. Currently we’re in talks with 10 banks within Ghana, all with a pan-African perspective.
Technology is most effective when used to solve a problem that is ready to be solved. This is different from solving a problem that needs to be solved. The impact of culture can slow down the growth and impact of technology if that technology doesn’t fit with a particular agenda.
Entrepreneurs – we absolutely love problems!
Phillip Jarman is UK Director and Chief Commercial Officer of BenBen, a tech start-up founded by Emmanuel Noah and Daniel Bloch, designed to tackle land property fraud and support economic revival in developing Africa. Phillip is a graduate of the MBA programme at Imperial College Business School in London, UK.