With approximately 4 in 10 Nigerians living below the national poverty line, the “Giant of Africa” needs effective strategies to tackle these alarming rates and promote inclusive growth. In an era defined by rapid technological advancement, innovative solutions empower impoverished communities. Blockchain technology offers the potential to be one technological game-changer in the process of achieving poverty alleviation in Nigeria.
What is Blockchain technology?
Blockchain technology is a decentralized digital ledger that securely records transactions across multiple computers. It operates on a peer-to-peer network, where each transaction, or “block,” is linked to the previous one, forming an immutable chain. This technology ensures transparency, security and trust as all participants in the network have access to the same information, eliminating the need for intermediaries and enhancing efficiency.
4 Ways Blockchain Technology Helps Poverty Alleviation in Nigeria
- Advancements in Financial Inclusion: Initiatives such as “Project GIANT” by the Central Bank of Nigeria (CBN) aim to leverage blockchain technology to enhance financial inclusion in the country. Under Project GIANT, the CBN has partnered with financial institutions and technology companies to develop a blockchain-based solution for Know Your Customer (KYC) verification. KYC is a crucial process for accessing financial services, but it can be challenging for individuals in underserved areas who lack formal identification documents. By utilizing blockchain technology, Project GIANT enables individuals to create and manage their digital identities securely fostering sustainable change for poverty alleviation in Nigeria.
- Transparent Governance and Anti-Corruption Efforts: By implementing blockchain-based systems for public service delivery, procurement processes and records management, Nigeria can increase transparency and reduce corruption. This ultimately allows for an efficient utilization of public resources and poverty alleviation in Nigeria. One successful example is the “Abuja Electronic Government Records and Document Management System” (E-Records System) implemented by the Federal Capital Territory Administration (FCTA. Through the E-Records System, government agencies in Abuja can securely store and manage various types of documents, including land titles, property records, permits, licenses and official correspondences. The decentralized nature of blockchain ensures that no single entity can manipulate or falsify records, reducing the potential for corrupt practices.
- Secure and Transparent Social Programs: Using Blockchain’s transparency and tamper-resistant features, Nigeria can guarantee that aid reaches its intended beneficiaries, minimizing leakages and improving the effectiveness of poverty alleviation in Nigeria. The “Building Blocks” initiative by the World Food Programme (WFP) was piloted in collaboration with the government of Nigeria and focused on providing food assistance to vulnerable populations, particularly internally displaced persons (IDPs) affected by conflict. WFP currently distributes food and money (including mobile-phone-based transfers) to 1.2 million people each month in Yobe, Adamawa and Borno. They profited off blockchain technology to improve the delivery of food assistance by enhancing transparency, reducing fraud and ensuring aid reached the intended beneficiaries.
- Access to Funding and Investments: Blockchain-based crowdfunding and tokenization platforms can democratize access to funding and investments. Entrepreneurs, including those in underserved areas, can showcase their ideas and projects to a global pool of investors, potentially attracting financial support for business ventures that can generate employment and economic growth. One notable example is the Nigerian “Farmcrowdy” platform that connects small-scale farmers with investors through a blockchain-based crowdfunding model. The platform enables individuals to invest in various agricultural projects, such as poultry, crop farming and fish farming, by providing funds for inputs, equipment and other farming needs. The impact on poverty alleviation in Nigeria has been significant, with farmers’ incomes increasing by an average of 50% per hectare in two years after registration and 500,000 new jobs in the areas of processing, transport and warehousing and cooling.
A Positive Impact
Overall, Blockchain technology presents a transformative opportunity for Nigeria to alleviate poverty and achieve sustainable development. It’s a promise of progress that can boost the Nigerian economy by $29 billion by 2030. While it continues to evolve and demonstrate its potential, its impact on Nigeria’s development and poverty alleviation efforts can inspire other nations to explore and adopt similar solutions tailored to their specific contexts and challenges.
– Miriam Schuller