What comes to mind when you think of the country of Nigeria? Is it a large population or, like many online and in real-life, fraud? For a lot of people, Nigeria is practically synonymous with corruption and fraud, mostly owing to the amount of attention it has gotten in many years for those two reasons.
In terms of fraud, the most commonly discussed one is the 419 fraud type which has made the ‘Nigerian scammer’ or ‘Nigerian prince’ into a famous trope and punchline across the globe. On top of this, there’s also the issue of corruption within the country, with millions of dollars somehow going missing from government accounts to the viral story of ghost workers, non-existent people who received salaries for allegedly working for the government, that was revealed a few years ago.
In Nigeria, the fight against corruption has been a long one and it still ongoing and while many have already jaded towards the idea of a corruption-free Nigeria, some still have optimism. Over the years, there have been discussions of how exactly corruption can be purged from the country. Some have suggested an overhaul of the government, some say a cultural revolution needs to take place and some tech enthusiasts have suggested that blockchain might be part of the answer.
Blockchain might be most famous for cryptocurrency, but the technology itself is very diverse and also very interesting in its applications. Blockchain, or distributed Ledger technology in general, works in many use cases by creating an irrefutable record of transactions that take place over the block. These records cannot be removed and also are near-impossible to be tampered with. This has made it very popular in Industries where record-keeping is of great importance such as the supply chain industry, food distribution, the precious metals and stones industry and so on.
The idea behind these use cases is rather simple; records can be created instantaneously, cannot be tampered with and cannot be removed which makes the margin of error reduced to near zero. The possible applications of blockchain are just being explored in recent times, but it has been mentioned as a possible solution to mismanagement on both corporate and governmental level.
Corruption in itself is a complex topic, but broken down to its most basic components, the corruption that goes on at the governmental level in Nigeria is made possible by mismanagement of funds, poor record-keeping and a lack of checks and balances.
A few years ago, they were an increase in incidents of whistleblowers discovering huge amounts of money stored in private residences of government officials and their associates. These funds were taken out of official government accounts and simply were never accounted for. Someone was clearly bribed, bullied or was complicit in turning a blind eye to this outright theft. In this case, having financial transactions related to the government carried out over a blockchain could help in easily determining who took a certain amount of money and where they were moved to, without as much need for whistle-blowing.
At the end of the day, most of the problems being faced when it comes to is corruption due to a misuse, mismanagement and outright theft of funds and if these funds could be managed in a way that is not left at the mercy of human error and human integrity, this problem could be eliminated to a great degree. One only has to take a look at developed nations such as the United States in which tax evasion is considerably lower than in third-world countries and is heavily persecuted because of the use of social security numbers that make it difficult for individuals to hide their income. It is not a manual system and is not subject to human error.
In the cases of funds mismanagement that have made it to court in Nigeria, there was often the challenge of tracing the funds and pinpointing at which point they were taken and where they ended up. If blockchain was to be implemented on a national level, it would be much easier to trace stolen funds and to convict those who engaged in theft. It would also act as a deterrent for future criminals if there was a noticeable pattern of perpetrators being caught and punished.
A practical example of this is when Cryptopia was hacked and some of the funds were traced to certain exchanges such as Binance, who were immediately able to freeze them and prevent the hackers from selling off the tokens. Should this level of efficiency in tracking stolen funds be applied in real life, one can only imagine the ripple effect across an entire nation.
While blockchain has shown itself to be a solution to many problems in the last few years, there is the risk of overstating its ability to solve all possible problems. As MasterCard’s CEO pointed out in a recent interview, blockchain is not a magic bullet that will solve all the world’s problems and all possible applications need to be looked at on a case-by-case basis.
It is arguable that if the nationwide implementation of blockchain technology was to be carried out by the Nigerian government, the fight against corruption would receive a significant boost.
The most obvious rebuff to this idea is the question of whether Nigeria’s current economic and technological state could support a massive overhaul of the system and the nationwide implementation of blockchain. After all, the country famously struggles with electricity, water, and various infrastructural problems. Obviously, such a change will not take place overnight will be necessary to approach the issue with realistic expectations and not out of a desperate need to cling to new technology.
An example of a country that also faces an economic crisis is Venezuela, which implemented their national cryptocurrency called the Petro back in 2018. For many, it was seen as a last-ditch effort to revive the economy and thus far, the inflation rate has remained high and while there has been some relief by having an alternative medium of exchange as opposed to their ever-failing fiat currency, it has not been a silver bullet nor a fix-all to the problems of a struggling nation.
Corruption is of course ultimately not a technological problem but a human problem. However, should the right checks and balances be put in place, this human problem can be curbed to a certain degree and Nigeria could take a giant leap forward in its fight against the deep-rooted issue of corruption.