blockchain technology takes off in Africa, Kenya’s preparedness comes to
critical focus due to its robust technological ecosystem that has, in the past
15 years, attracted tens of global digital business companies.
There are numerous gaps in the field in Kenya but this
revolutionary technology will eventually disrupt every sector, hence the need
for the world to fully prepare.
The Blockchain and Artificial Intelligence Taskforce officially
presented its report to the Information Cabinet Secretary Joe Mucheru in July
2019, with recommendations on how to go about this technology in the coming
But what is blockchain?
It is a distributed and decentralised ledger technology (DLT)
that chronologically and publicly records all transactions in a network.
The digital ledger is held and updated by anyone who takes part
in maintaining the network, so it is a peer-to-peer platform that eliminates
intermediaries, thereby creating trust.
There is no transaction that can successfully join the chain
without being validated by nodes and new transactions create a complexity that
locks out hackers.
For any hacker to succeed, he or she must hack every ‘block’ but
there are millions of them.
“Every user has a public (username) and private (password)
key. In this system, any person can encrypt a message using the
receiver’s public key but that encrypted message can only be decrypted with the
receiver’s private key,” expounds Mr Benjamin Arunda, author of “Understanding the Blockchain”.
The technology has the capacity to store any form of digital
data by use of smart contracts. A smart contract is a computer code designed to
allow an execution of an agreement once two or more parties involved enter
their private keys. These codes are used to execute transactions when the
provided criteria is met.
The World Economic Forum has stated that by 2025, 10 per cent of
the global gross domestic product (GDP) will be stored on blockchain and
It can be applied in any process that lacks trust in sectors
like education, health, law, journalism, film, construction, tourism, lands,
mining, banking, insurance, transport and communication.
“This is the technology that will eventually help
democracies achieve electoral justice. Election rigging shall become a practice
of the past. To achieve free and fair elections, blockchain must be used to
create a tamper proof system that eliminates voter fraud and provide an
authentic record of votes cast,” says Mr Arunda.
It is on this chain that the Central Bank of Kenya can
decentralise funds allocated to county governments and monitor their use in
Through cyptocurrencies, cross-border payments will be
posssible, allowing Kenyans to send and receive money around the world at
minimal costs. In future, cash out points could be found in rural areas.
The government also needs a Single Source of Truth (SSOT)
regarding land ownership and transfer of property in Kenya. A distributed
ledger like blockchain has public witnesses called nodes who help to validate
each transaction. This will end land grabbing and fraud.
In the education sector, smart contracts will help curb cases of
degree certificate forgery and infringement into academic content copyrights.
It will also help to create an e-portfolio for all academic credentials.
It will allow for safe and easily accessible storage of files on
a cloud and boost transparent fees payments and external funding.
Blockchain can create chains of authenticity in media to make it
possible for readers to validate news and also ensure every journalist earns
from his work – story text, image, graphic or video.
“Imagine reading an article and receiving a percentage of
cryptocurrency into your wallet as a reward. There is a private blockchain
customised for journalists currently in use across the globe called Civil,
which is a decentralised communications protocol designed for independent
newsrooms and journalists that are experienced in producing high quality
investigative international and local feature stories. Any journalist can join
“You have heard of surgeries being done on the wrong
patient. This arises from confusion of patient data and clinical medicine, but
research has shown that 56 per cent of healthcare providers are hopeful to
start using blockchain by 2020.”
This is the technology that will block middlemen in the trading
of shares, bonds and securities. It will offer an efficient platform for the
issuance, transfer and management of private company securities I a manner that
The reason why lawyers prefer physical files to digital ones is
distrust. Smart contracts can be used to replace the physical legal contracts.
“There is a new opportunity for lawyers called Blockchain
Law. Lawyers specialised in this tech will be in high demand in the next five
to 10 years. Chains of custody and notary publics will be secure and no one
will be able to alter evidence or timestamp (digital fingerprint),” says
Blockchain-based file sharing will help eliminate the theft of
patented property and create trust in 3D printing. 3D model files can be shared
using the all secure technology which will verify 3D printing machines and
“You are aware of the fake gold scandal that happened in
Kenya a few months ago. Blockchain smart contracts with predefined conditions
can be developed and used by suppliers of minerals and mining companies to
execute transfer and acquisition agreements,” says Mr Frank Deya, the
Chief Operations Officer of Aeternity Hub Africa.
The mining industry can rid itself of the corruption and theft
that occurs in the process of registering mineral rights, and the problems that
arise from the chain of custody, by embracing blockchain.
“Traders in gold, diamond, silver, emerald and other
minerals have always flouted the mining laws and management of inventory
reserves. There have also been scuffles during the construction and handing
over of mining sites. The solution is blockchain,” he says.
How prepared is Kenya for this ground-breaking innovation?
“When the internet was launched in the 1990s, people across
the world were hesitant to believe its potential in changing lives. Some
complained of the cost and scalability.
“But with time, the internet became exceedingly
revolutionary and everybody embraced it. It is the same case with Blockchain.
We will have some hurdles now but eventually every sector will adopt it. It
will be inevitable for both the public and private sectors,” says Prof Bitange
Ndemo, chairperson of the Blockchain and Artificial Intelligence Taskforce and
an associate professor at the University of Nairobi’s School of Business.
At present, we have a number of tech organisations spreading the
blockchain awareness in the country.
Blockchain Association of Kenya, Aeternity Hub Africa, BitHub
Africa, Distributed Ledgers, Blockchain & Research Technologies (DLBRT)
Blockchain for Business, Exponential Operating System (EOS) Nairobi community
and Andela Kenya have all been in the frontline in educating Kenyans since
“We are gradually gaining more following in this
field. Nowadays we have more people coming to our free training events. We
have blockchain meet-ups every week to spread the gospel in Nairobi,” says
Blockchain Association of Kenya’s chairperson Ms Roseline Gicira.
The blockchain magic is being spread to tech savvy Kenyans in
universities and colleges, and now these efforts are being extended to
“We are driving the adoption of blockchain in Africa
through corporate trainings, educational programs, workshops and boot camps. We
train software developers on best practices for building decentralised
“We are now working closely with companies to help them
identify their areas of operation that can benefit from deployment of certain
elements of Blockchain. We enable traceability of goods in a supply chain,
integrate cryptocurrency payment gateways and also enable crowdfunding,”
says Mr Deya.
So how much does blockchain training cost?
“This varies and depends on where you taking it from.
However, loads of free online resources from reputable vendors for example IBM
has great foundation courses that one does not have to pay for and can
“Many other schools have dedicated classroom programs that deal with solving real life problems such as Funtrench and Kesho Labs,” says Mr Michael Onyango, a thought leader at Future of Work and Emerging Technologies who is also a member of the Blockchain and AI Taskforce. “Programming students at Strathmore
University have had a chance to learn how to code blockchain
networks thanks to our partnership with the institution. For short courses that
go for a week, we charge Sh50,000 while long courses that last three months
cost Sh500,000,” says BitHub Africa’s chief executive officer, Mr John
Aeternity Hub Africa does not charge students and learners but
companies part with between Sh200,000 to Sh400,000 depending on the complexity
of the solution and number of employees to be trained.
At Nairobi’s renowned technology hub, Moringa School, students
benefit from weekly blockchain trainings that help to prepare their brains for
the Fourth Industrial Revolution, according to the institution’s country
director Ms Stacey Ondimu.
Another blockchain academy in Nairobi was launched on July 2019
to scale up the market of blockchain education.
“Kwakoo Academy offers other trainings in other emerging
technologies such as AI and data science but the anchor courses will be blockchain
and cryptocurrency,” says Mr Arunda.
The academy charges Sh15,000 for entry level trainees, Sh30,000
for intermediate Blockchain knowledge, while those who aim to be experts in the
field part with Sh50,000.
But where in Kenya is blockchain being commercially utilised?
Already, this technology is being used in the agribusiness
sector across 20 counties by Twiga Foods who are working together with
technology provider IBM.
They source fruits and vegetables from 17,000 farmers across 20
counties and deliver them directly to 2,500 vendors a day in Nairobi and its
“Many multinational firms that operate in Kenya are using
this technology. Maersk is working with EY and Microsoft to ease shipping and
insurance. Barclays Bank, in its bid to curb identity theft is now deploying
blockchain because it has the ability to eliminate the hurdles of time in
identification and verification,” says Mr Onyango
The country remains optimistic that through continued government
support, every sector will embrace the technology.
“We are happy that the Ministry of Information,
Communication and Technology is giving this tech space sufficient support. Once
this technology matures, the debate about whether the country is ready will
end. It is ubiquitous and its use will be everywhere to weed out corruption and
other social vices,” says Prof Ndemo.
The expert notes that this technology must be leveraged with
other emerging technologies to create a robust ecosystem that not only creates
trust but also eases accessibility, increases speed of data transmission while
ensuring that the data is accurate and secure.
“Blockchain will eventually be synchronised with Artificial
Intelligence (AI), data science, 3D printing, 5G network and Internet of Things
(IoT) to create a seamless web of cloud sourced services in a secure and
transparent tech ecosystem.”
Mr Arunda says that the Capital Markets Authority (CMA) is
gradually increasing the adoption of blockchain by creating a regulatory
“Sandbox is a test environment that allows start-ups to try
their projects in real market ecosystems without being subjected to exclusive
regulatory hindrances,” he explains adding that there has been
significant support from the Central Bank of Kenya regarding the technology.
WHAT KENYANS SAY
A Blockchain discourse held at Metta, Riverside, Nairobi last
August centred around the possible application of Blockchain and AI in
governance, land and housing, finance, healthcare, food security, manufacturing
and culture, highlighted more utility for the technology.
“In the manufacturing sector, a hyper ledger is needed to manage
stock using synchronised inventory data mechanisms from the point of processing
to shelves up to the point of sale,” said Mr Cyril Michino adding that
supermarkets’ use of physical stock taking is not accurate.
Lack of traceability, data insecurity and immobility are the
hindrances ailing the shipping industry as importers struggle to succeed in
product recalls leading to losses. This also creates a loophole for tax evasion.
Mr Pablo Muigai, a developer, decried the poor state of shipping
in Kenya explaining how he witnessed a meat exporter lose a Sh1 million in meat
exports simply because documentation done at the Kenyan airport had spelling
errors from poor handwriting.
“I know a businessperson who lost six containers of avocados
just because his importer said they were rejects. There was no verifiable and
trusted second opinion, something that Blockchain, AI and IoT can solve,” said
Johnson Gitonga, a Blockchain enthusiast and writer.
Blockshipping was recommended to offer a Blockchain Container
Register which records who owns and operates the container in a safe and
In addition to the classical registration, the register is also
able to convert the physical containers into tokens. Tokenization of physical
containers on the blockchain provides indisputable proof-of-ownership.
This makes it possible to record changes and transfer in
possession of a container in a safe, transparent and traceable manner.
But this will come through research, experimentation and
awareness in local dialects. “With streamlined regulation and public
acceptance, gradual adoption will eventually graduate to full adoption,” said
The team also called for the inclusion of the technologies in
the school curriculum as that is where the future is heading.
It was noted that grey areas still exist in the finance sector
regarding regulation of digital loan apps, the cost of bank loans and cross
“To solve this, the Huduma Act needs to be revised to ensure all
Huduma Namba data is captured on a government blockchain to ease identity.
Thereafter, mobile fintech solutions can be developed on blockchain by
digitizing assets using The Movable Property Security Rights Act of 2017
,” said Amos Kinuthia from DLBRT.
Governance, being the most critical pillar of development needs
decentralisation. Currently, each county handles its issues solely and
“Decentralized technologies should be used to merge government
ministries and agencies to avoid the dupilicy of services we see,” said Laban
Kariuki, a blockchain lover.
In the land and housing sector, there have been squabbles when
tenants demand for their rent deposit from their landlords with squabbles
“Landlords are unable to verify tenant details, and sometimes
they don’t know who didn’t pay rent, but blockchain can be used in solving this
through smart contracts on mobile apps,” said John Mbugua.
A smart contract is a computer code designed to allow an execution
of an agreement once two or more parties involved enter their private keys.
These codes are used to execute financial transactions when the provided
criteria is met.
The construction industry has seen illegal planning approvals
with zero innovation happening. The cost of development finance is prohibitive
for developers besides the pain of title deed verification.
“Lobbying is needed needed to ensure all land data is placed on
a blockchain to ease the digitization process. This will curb land fraud and
construction of poor quality houses that later claim the lives of tenants,” he
Healthcare has seen a communication breakdown between hospitals
disappoint patients who expect quality diagnosis and treatment, arising from
poor data management.
Rogue doctors have been known to sexually assault unsuspecting
patients, misdiagnosing diseases and doing shambolic surgeries.
“But if a blockchain was in place, all patient data would be
captured and shared in real time among hospitals. Patients would also be
confident to deal with qualified physicians, with a good balance between data
privacy and data transparency being struck,” Jackline Gachiri remarked.
To enhance food security, the entire supply chain of farm inputs
such as seeds, fertilizer and pesticides should be run on a blockchain to weed
out fake input sellers who supply chemicals that destroy farm soils.
“Political goodwill is needed to ensure this happens. There has
been too much politics in the supply of inputs and the purchasing of farm
harvests. Blockchain can help us shere,” said Michael Ondiala.
Kesho Labs chief marketing officer Roselyne Wanjiru highlighted
that the tokenization of the creative economy, including arts, audio-visual
media and sports will enable professionals access more efficient intellectual
property protection, earn sustainably from their work, and gain more structured
investments to boost the creative industry.
“We believe the report is balanced, comprehensive, use case
specific and relevant to the current digital transformation. We are glad that
the taskforce came up with several meaningful conclusions,” a statement from
EOS Nairobi community read.
“We support the task force’s proposal that the government should
operationalize the Computer Misuse and Cybercrime Act of 2018 with a national
computer and cybercrime coordination committee that ensures regulation and
However, the penetration of knowledge and skills of the
technology is still way below targets, with only a few companies coding their
own private blockchain networks.
“The biggest challenge in most blockchain networks has been
scalability. Most networks have a limited number of transactions that can be
run per second,” says Mr Felix Macharia, the co-founder and head of
community operations at EOS Nairobi, but adds that the company has come to
solve this fundamental hurdle.
“EOS is an application development just like Android only
that it is decentralised. It is not run by any individual or central company
but by an open source community spread across the world,” he expounds.
With only one company in Kenya providing scalability solutions,
the challenge is enormous for companies that need private Blockchain networks.
The Ministry of Education also needs to upgrade the content it
offers to university and college students, for the country to create a
generation of brains that will spur economic growth in the next few decades.
“We have witnessed a slow progress in skills development
particularly because our education system has not been fast to include emerging
technologies in university syllabuses.
“In developed economies such as the United States, United
Kingdom and Canada, Blockchain is presently being taught in colleges. Here in
Kenya, we seem to be taking too long to realise how much critical these skills
are,” says Prof Ndemo.
Mr Karanja has a similar observation.
“What we lack as trainers is institutional support
especially from public universities and colleges. We have poor policies
regarding the uptake of new technologies in the academia,” he says.
How can we solve these teething problems?
He adds that for the Fourth Industrial Revolution to be
actualised in Kenya, holistic support is needed in a public-private partnership
models because emerging technologies are now becoming inevitable to adopt.
“There is an urgent need for societal and politico-economic
change of policy to accommodate this technology and help speed up its uptake.
More awareness across the country is needed,” says Roselyne Wanjiru, Kesho
Lab’s strategic liaison officer.
The report on blockchain and AI gave the government
recommendations that seek to help Kenya tackle main problems like corruption,
land fraud, food insecurity, fraudulent procurement and election
“The great challenge is now passing the information to the
political class and explaining to them how this is going to work. If people can
be able to trust technology like M-Pesa then we should also trust blockchain to
deliver free, fair and transparent elections,” said Mr Mucheru.
He hailed the report’s recommendation to have a digital
register, saying that if someone has charged their land title deed with one
bank and wants to get a better interest rate from another bank, he or she
doesn’t have to go through the same process again since one bank can pass the
information to the next one, making it easy to get loans, mortgages and other
The report also indicated that other countries that are using
Blockchain and AI to fight corruption include Ghana, Georgia and Ukraine which
are looking to reform land registry by building immutable title deed systems.
To control government’s huge public debt, the report recommends
creation of a digital asset framework to enable citizens to raise funds through
Initial Coin Offers (ICOs) as a strategy to help local investors put their
resources in cryptocurrencies underpinned by the utility of local resources.
“Kenya needs to pilot this promising concept and issue an
infrastructure coin or one that deals with the problem of unemployment,” the
As part of the financial inclusion drive — using India as an
example — the taskforce recommends the creation of a National Payment Gateway
using a public-private partnership model. This payment gateway becomes the
central point for all digital payments. This will ensure, the report says, a
reduction in the cost of transactions and the beginning of the journey from a
cash-based economy to a full digital economy.
However, for this to happen the government has been advised to
conduct awareness campaigns and education to foster citizen’s financial
literacy and capability. It will also need to leverage citizen ID for ‘Know
Your Customer’ for opening bank accounts and providing credit, establish robust
financial consumer protection frameworks and implement a Financial Technology
(Fintech) Legal and Regulatory Sandbox.
“To reduce transaction costs, Kenya should leverage Blockchain
and AI to identify fraud indicators and conduct a public awareness campaign. It
should also introduce legislation to compel financial institutions to report
fraud incidents and encourage CBK to leverage Blockchain and AI to verify
institutional reporting,” says the report.
To improve public service delivery, the team recommends adopting
Blockchain to provide “a single source of truth” for all government documents
and services. This will be powered by a digital identity service (Huduma Namba)
and a digital fiat (surrogate) currency.
The report also covers the all important question of food
security and safety, stating that Kenya needs to apply AI and analytics to
detect fraud, trace unsafe products and deliver training to farmers to improve
The country also needs to consider distributing farming
subsidies, including those for fertiliser, through “a Blockchain controlled
Agri-token” that reduces fraud and ensures farmers receive the needed
assistance by leveraging citizens’ identity.
The government, the report says, also needs to introduce a
citizen service that tracks the origin of food products and reports those which
The taskforce also recommends aggressive use of technology to
improve integrity of medical records, in consent management for greater patient
privacy, and in setting up reward systems for patients who avail their data for
The government, it adds, should tap Blockchain to enable
customers trace the supply chain of medication, help tackle counterfeit
medication and augment the skills of medical professionals.
To eliminate counterfeits in the wider manufacturing sector, the
technologies should be used to create an electronic, interoperable system to
identify and trace outputs and inputs as they are distributed in Kenya.
Another key recommendation by the taskforce is the use of
technology to enhance political democracy and avoid disputes that can degenrate
into post- election violence.
“Last year, Sierra Leone became the first country in the world
to use blockchain in tallying presidential elections alongside the normal
process to demonstrate that indeed Blockchain can be used in tallying votes,”
The ball is now on the government’s court to seek political
backing for implementation in critical government initiatives such as Huduma
Namba and Ifmis.
Is it the solution to all economic malpractices?
Despite blockchain’s promise of creating a global trust in every
sector, it is not a panacea to all the problems we have in our socio-political
and economic life, but it will help a great deal to create worldwide sanity,
integrity and ethics.
“Technology can be used to create trust, but even with the
advancement of Artificial Intelligence, it cannot create empathy,” Prof
However, blockchain’s disruption will help halt the greed, abuse
and madness witnessed in Kenya’s public and private offices, where ego and
impunity leads men and women to loot funds such that Kenyans become afraid the
situation will never change, and believe it can only escalate.
“More than two billion people are considered unbanked in
the world and have no access to financial services. Blockchain technology has
the potential to shrink the poverty gap by increasing financial inclusivity,
reducing financial misappropriation and enabling decentralized access to
value-creating assets,” says Mr Onyango.