Kenya Plans on Using Blockchain to Distribute Affordable Housing

Kenya’s government is looking into using blockchain technology to deal with allocation and fund management of a state-sponsored affordable housing project, Keynan news outlet the Star reported on October 15, 2018.

Managing the Distribution of Half a Million Housing Units with Blockchain

Affordable housing units in Kenya

(Source: Ebru)

Blockchain is slowly making its way into the African market, with governments and NGOs looking into employing the technology to help deal with the continent’s burgeoning housing crisis. The government of Kenya is reportedly looking into blockchain as a way of dealing with inefficient bureaucracy.

According to an October 15 report from The Star, a Kenyan news outlet, the country’s government plans on deploying the technology to manage a government housing project of 500,000 units. The half a million units will be built by 2022 and will assist citizens earning less than 100,000 Kenyan Shillings, which is just under $1000.

According to The Star, out of the 2.48 million Kenyans employed in 2016, only 77,000, or 3.1 percent, earned over Sh100,000, which is the threshold for affordable housing.

By using a blockchain, the government will ensure a safe and efficient distribution of housing to deserving participants in the program. The technology will also address issues of graft from both legislators and beneficiaries, The Star reported.

Kenya’s government hopes that the new technology will help them reestablish trust in such initiatives following the National Youth Service scandal, in which 40 civil servants and 14 private sector officials were arrested for looting $78 million from the project’s coffers.

The project will reportedly be financed by the National Housing Development Fund (NHDF) under the Finance Act of 2018, to which Kenyans will contribute 1.5 percent of their salary that will be matched by their employers. The Star reported that those who do not qualify for affordable housing will be refunded their contribution upon request at the end of 15 years.

Kenya Ahead of the Curve When It Comes to Blockchain Adoption

Speaking at the second urban dialogue on the affordable housing agenda with the World Bank in Nairobi, Housing and Urban Development Principal Secretary Charles Hinga said that the country will use blockchain technology “to ensure rightful owners live in government-funded housing projects.”

Hinga’s statement mirrors the government’s newly adopted stance on corruption. Bitange Ndemo, chairman of Kenya’s Distributed Ledgers and Artificial Intelligence task force, said back in September that the government should look into tokenizing the country’s economy.

The task force, established in March 2018 and tasked with looking into the practical implementations of blockchain technology, suggested that that adoption of tokens would help reduce unemployment levels and remove the inefficiency and corruption that plague the government.

However, the Central Bank of Kenya’s (CBK) is still wary towards cryptocurrencies, issuing a circular warning to all banks operating in the country back in April 2018 that warned about dealing with digital currencies or engaging in transactions with crypto-related entities.

Featured image by Vinnie Spano

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