Blockchain: Food safety, healthcare, property rights can drive adoption

By David Whitehouse
Posted on Wednesday, 13 July 2022 06:00

Africa needs better validation of food origins and quality. REUTERS/Thomas Mukoya

Food safety, healthcare and property rights are the key areas which can drive Blockchain into mainstream use in Africa, Shadrack Kubyane, co-founder of Coronet Blockchain in Johannesburg, tells The Africa Report. 

African nations need to improve food security and food safety while normalising the sourcing of food from within the continent, Kubyane says. “Both these priority focus areas can be addressed via Blockchain.”

Investment in Blockchain has been slow to take off in Africa. According to Standard Bank, African Blockchain ventures secured $127 million in funding in 2021, just 0.5% of the global Blockchain total. Food security is an area where innovation is badly needed. The continent has the highest level of food-borne disease in the world, with 91m cases of sickness each year and 137,000 deaths.

  • That leads to annual productivity losses estimated by the International Finance Corporation at $16bn. The World Bank has estimated that in Kenya alone, the annual cost of unsafe food is about $800m, or nearly 1% of GDP.

The transparent and immutable nature of Blockchain transactions means that the source and quality of food are made traceable, Kubyane argues. “We cannot continue to have a scenario where shadowy middle men decide to play a gatekeeping role,” in which they use their discretion as to whose goods can pass.

Kamau Nyabwengi, CEO at the Young Entrepreneurs Network (YEN) Africa in Nairobi, points to the example of the beef industry in South Africa, which has started using Blockchain to create digital livestock records. BeefLedger is a “farm to fork” verification and traceability system, originally developed in Australia, which validates the providence and authenticity of beef products, including sale history and consumer feedback.

Africa’s pharmaceutical supply chains are also ripe for overhaul, with more than 100,000 deaths annually as a result of counterfeit medicines.

  • The World Health Organization has said that Africa accounts for about 42% of fake medicines globally.
  • A group of African states has agreed to create a new African Medicines Agency, though its leadership and location have yet to be decided.
  • Making pharmaceutical supply chains transparent via Blockchain is “no longer a negotiable scenario, but a must,” Kubyane says.

Team sport

Blockchain-based land registries would also be a crucial innovation, Kubyane says. In Nigeria and South Africa, there are still third- or fourth-generation farmers working land for which they have no title deeds. Families likewise live in properties for which they have no clearly established ownership, making loans hard to access.

The priority objectives set out on the UN’s Sustainable Development Goals (SDGs) “will not be fulfilled if we still have communities that face financial exclusion instead of inclusion, because they have no collateral whatsoever,” Kubyane says.

Better regulation is key to unlocking Blockchain’s potential. African governments should work to understand the technology and “give a clear view of their stance” in regard to its use, says Nyabwengi at YEN. “This will reduce uncertainty amongst investors who want to invest in Blockchain on the continent.”

  • Governments are making progress, but regulatory efforts remain constrained by “the fear of the unknown,” Kubyane says. Countries need to work together on joint regulation which draws in a variety of stakeholders, he adds.
  • There is a need for governments to relinquish the current “them and us mindset”, Kubyane  says. “Blockchain is a team sport, not a solo space.”

Bottom line

Africa is the continent with the most to gain from immutable transparency on product origins and quality.

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