Blockchain - Transforming Africa

The Consensus Economy is a pillar in today’s society. Technology plays a role in the development of this economy, especially open-source technologies like the internet, the blockchain, and other distributed ledger technologies.

I want to highlight the blockchain as the linchpin for the iteration of this economy. But there’s much to learn and so many ideas to try out. In this world, to propagate ideas requires funding, and how this comes along is through the framework of research.

This is especially so in the African perspective where the blockchain technology could provide real world case studies on a massively impactful basis across the spectrum of society.

Let me put this into perspective:

BitHub Africa, a blockchain accelerator produced a report titled The African Blockchain Report, which is a 136-page rendition of the huge avenues that blockchain creates.

Furthermore, the UK Research Council recently granted £3.6 million in blockchain grants to seven projects. The blockchain industry has matured quite well, moving from the already proved financial use case. And herein lies the field of research - so much can be built on the blockchain.

On Tuesday, August 1 saw the coming together of the business community in Kenya at Moringa School to explore the ideas floating around with regard to the blockchain technology.

Of particular excitement was XinFin's proposal, which is a nonprofit organization that aims to address the infrastructure deficit for governments and institutions via blockchain.

Xinfin.org has essentially developed private permissioned blockchain platform over the Ethereum network. The smart contracts have been matched to real world contracts for project financing except for one major change - Xinfin. Xinfin.org has allocated up to 25% of the underpinning blockchain tokens that are available to financiers as a bounty/cashback for financing infrastructure projects.

The native token XDC also functions as a real time gross settlement mechanism for the transfer of funds and trades. This bounty or cash back of up to 25% of the tokens motivates financiers to take up financing projects.

Drawing from their whitepaper-“When blockchain tokens are created they are defined with the fixed set of supply over the period. Thus it would create a scarcity in the market and resulting in a multifold appreciation of value in almost every blockchain-based token that is launched, due to the urgency shown by its buyers over the limited supply. We believe that the bounty of cash back tokens and its inflation proof nature and potential for increasing in value will let the financiers offer easy terms to finance real world infrastructure projects. Our initial discussion with buyers, suppliers and financiers has given positive feedback to the business model.”

The estimated financing requirement to close Africa's infrastructure deficit amounts to USD 93 billion, all the way to the close of 2020. Over the past decade, infrastructure has contributed close to a percentage point to the annual per capita GDP growth.

Setting the infrastructure endowment on a positive trajectory could see this figure move to 3 percentage points according to the world bank.

Addressing Kenya's infrastructure deficit will require that she spends an annual USD 4 billion within this decade if Kenya’s is to continue to stand out as a hub for economic development in East Africa and the greater African region. This is a remarkable figure and begs the question of what other efficient ways can the state adopt to fill this gap. And this is not to mention the USD 1 trillion global infrastructure deficit per annum.

Surmounting the infrastructure bottleneck, XinFin reports would ameliorate the long-term-term economic growth for countries, communities and a wide range of industries, therefore it is a key driver for growth in the long haul.

Emerging markets to suffer from the lack of investment in well-designed transport, renewable energy, and social infrastructure, which curtails a lot of the economic development needed.

The primary impediment to greater infrastructure investment is not the lack of available financing given abundant funds in world markets and very low long-term interest rates. The problem is inefficiency in systems to match the supply of finance from the private sector with investable projects.

The XinFin team has built a blockchain infrastructure suitable for a private distributed network of stakeholders (investors, governments, institutions and suppliers) spread across the world.

Kofi Afrikanus, fondly known as the cryptotraveler and the African Community manager for XinFin said, “this is an unprecedented opportunity for the business community to finance critical public infrastructure projects with low cost financing. Interestingly, XinFin's XDC token is among the few without transaction fees. Our platform as a crowdsourcing platform brings together financiers and infrastructure developers like institutions & government and hedge the risking with 25% bounty backed by our XDC tokens. I'm therefore urging the business community here in Kenya to present their proposals for consideration for funds to bridge the infrastructure gap.”

This is basically how it works:
• Investors use the XinFin platform to convert Fiat currency into XD• The transaction is recorded on an unalterable smart contract system, which runs on ethereum.
• The XDC serve as entry credits for investors to fund infrastructure projects.
• The money collected is used to pay contractors and service providers who build the toll road.
• The entire development uses IoT devices that are linked to a cloud based data server, providing real time updates to the government and investors alike.
• Once the road is constructed, people start using it, in return for toll fees.
• The toll fee collected is used to repay the investors through a Contracted Bank Account.
• Thus, a transparent and unbiased system like this ensures quicker financing of government infrastructure at a cheaper price with repayment assurance for investors.

Whilst agriculture is the backbone of our economy, infrastructure would be termed as the hands and legs of the same.

Blockchain coming up to provide a solution to this often murky world is a win for the technology. However, truth be told, altering legacy systems has always been the formidable task for the pioneering technology, but the trajectory is always positive.

Hopefully, the day will come when there will be decentralised publicly funded infrastructure projects on the blockchain.