How Blockchain Can Unlock Africa’s Land Capital And Spur Prosperity
Almost every family in Africa is entitled to a significant portion of land. However, the continent has the highest number of poor people.
Without the proper way of extracting value from these lands, the region may not be able to get out of the perennial poverty and lack of industrialisation. There is a natural attachment between humans and landed property, especially in most parts of Africa.
Many of the communal conflicts, if accurately traced, are as a result of rights over given portions of land or territory. There are copious cases of violent clashes leading to needless deaths over grazing fields across the continent.
What could Africans be missing in this aspect? The part of the world that has been able to maximise this God-given resource is the western world.
Unlike other regions, the West’s ability to organise their property industry in a manner that it could extract the capital locked within it is what differentiates it from the rest. Places like the Middle East and
Latin America and former communist states may not be having it as bad as Africa.
However, they also appear not to have figured out how the West is playing the land capital game. Perhaps, like Africa, they understand the possibilities therein, but for some reasons, have not bothered to utilise the sector.
Low Capital Potential For Lands In Africa
Let’s go back to Africa and try to understand the current situation with the lands and property sector. More importantly, why it has been difficult to unlock the enormous amount of capital locked therein.
Today in many African countries, if you count the number of landed properties that can be used as collateral to raise capital, you will realise that the percentage is tiny. Majority of these set of properties is located in the urban areas that make up only a small percentage.
Even within the urban areas, most of these assets are not easily liquidated because of the absence of records. In the West, land capital is real, but in Africa, it almost doesn’t exist.
Before we break that down, let us define the word capital and what it represents, especially in the socio-economic aspects of human development. In the olden days, humans measured wealth by herds of cattle or other livestock in ownership.
Notwithstanding, the idea behind this lies in the ability of the animals to be productive. These animals had the potential to produce more resources in the form of milk, hides, and even offspring, unless they are for consumption.
Hence, a person’s wealth or capital in the case was relative to the amount of livestock that he had. Based on this philosophy, you can justify what the West has been able to do in transforming land and landed property into sources of capital.
How did they achieve this? – Proper records!
Blockchain will Simplify Land Verification in Africa
In many parts of Africa today, it is an uphill task to sell or transfer ownership of land or landed property. The processes are rigorous, and even when they happen, it requires a high level of trust for long periods.
There is hardly any authentic proof in most cases that the acclaimed owner of a property is indeed the actual owner secondly, whether the seller has full rights over the property.
To clarify, this is the reason why it is difficult to present such property as collateral. These properties are potentially unproductive.
In some countries on the so-called dark continent, one piece of land can be sold to multiple people. It leads to violence and a law court system saddle with so many lands and property litigations.
So, they cannot assume such roles as capital like in the western world.
The advent of Blockchain and other emerging technologies has provided an opportunity for the developing parts of the world to catch up with their counterparts from other regions.
Blockchain technology can deliver that on the cheap! With a Distributed Ledger where no record is immutable, a codify property system is achievable.
Easy Verification makes Land Productive
For instance, imagine the possibility of a young entrepreneur walking into a bank with a Blockchain address and an ID card, and that will be enough to prove beyond doubt that he has rights over a given land. When banks will not have to send their teams in a back and forth mission to land agencies to verify documents.
Perhaps, this could be the eureka moment for the economic development of the African region. One of Africa’s primary problems is the lack of capital for small and medium scale enterprises.
In a continent where almost every family can point to a significant plot of land as theirs, being able to access capital using same could be the definite route to the expected industrial revolution. The banks have the funds but are scared to give it out as loans, due to lack of security.
Besides, when they do, the conditions are so extreme that the beneficiaries are scared to take such loans. Consequently, Creating a reliable system will undoubtedly lower the barriers in this sector and transform the enormous land resource in the region into the much-needed capital.
Land and property titles issued on the Blockchain is verifiable and immutable because via the inherent capability of the technology. Further, transparency in the property sector will be availed, and all conflicts involving land amicably adjudicated.
The technology is here; all that is required is the political will to push the agenda. Perhaps the time has finally come for Africa to rise from the dust and take its place among the top continents of the world.
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