August 21, 2019 – On Wednesday, I listened with interest as President Maada Bio of Sierra Leone rolled-out a project his government describes as “Africa’s first blockchain and decentralized digital identity implementation.” President Bio first announced this innovative plan during the United Nations General Assembly in September 2018. In keeping with his pledge, President Bio has started implementing his digitized strategy.
The project aims to provide Sierra Leoneans with a digital form of identity; Sierra Leoneans will also have the ability to give various organizations and institutions approved access to look up and verify who they are digitally rather than through the current slow, tedious and error-prone paper system.
The immediate value and significance of what Maada Bio is projecting are to improve access to healthcare services, education, financial services, and eGovernment for millions of Sierra Leoneans. The new digital platform will run on an innovative Protocol designed by a nonprofit organization in the United States. The protocol operates on a digital identification system that uses a blockchain.
The most widely known blockchain controlling “virtual currency schemes” is Bitcoin. One should support the efforts by President Maada Bio to improve the lives of Sierra Leoneans because modern finance is punctuated by advances in payments technology that cut costs and broadened access for the unbanked. The blockchain offers a lot of room for experimentation, especially in West Africa where current payment and financial systems are underdeveloped.
Sierra Leone will begin to see immediate growth in its financial sector as the country addresses two significant barriers to accessing financial services: a lack of formal identification and credit risks. The long-term effects range from improving healthcare outcomes to creating online learning platforms and increasing access to online education throughout Sierra Leone.
As an adjunct professor teaching Management Information Systems (MIS), along with Money Banking and Financial Markets, I am particularly intrigued at the prospects of combining finance and technology to boost economic development in sub-Saharan Africa.
The rapid spread of credit and the rise of internet banking have generated substantial cost savings. Over the past decade, mobile telephony has helped millions of people in sub-Saharan Africa make payments efficiently. Especially in Kenya, where M-Pesa redefined banking and empowered millions of Kenyans to access the formal banking sector. One victim of technological advances has been the age-old process of check writing, which has faded from many developed economies.
The bottom line: The blockchain offers a lot of room for experimentation, especially in places like Sierra Leone, where the current payment system is underdeveloped. Still, the government of Sierra Leone should show that it has the capacity and political will to regulate this new digital platform. Although the technology will cut costs and boost economic development, it must be made safe by protecting citizens’ information and allowing effective oversight by regulators. Liberia, Guinea, Ghana, and other West African states should take heed and boost their investments in technology to grow their economy. President Maada Bio is paving the way to increase foreign direct investments to Sierra Leone as neighboring countries grapple with growing their economy.