Ghana reached a $3 billion loan agreement with the International Monetary Fund (IMF) last year. Now, it will become the first African country to reduce public corruption via adopting blockchain technology for all government procedures.
“We are going to adopt blockchain technology to ensure that all data and transactions in the government space are transparent and tamper-proof,” said Vice President Mahamudu Bawumia at the May 14th Commonwealth Regional Conference and Annual General Meeting of Heads of Anti-Corruption Agencies in Africa.
Ghana’s previous plan, Revenue Assurance and Compliance Enforcement, was designed to identify and eliminate revenue leakages in areas such as petroleum bunkering, gold and minerals exports, port operations, transit goods, warehousing, border controls, and free zone operations.
“Implementing blockchain technology to safeguard government revenue involves creating a transparent, secure and efficient system for managing and tracking revenue and expenditure,” says Arthur Augustus, a senior software engineer at Lagos-based fintech vendor Parthian Partners Limited.
By harnessing blockchain’s immutability, decentralization and transparency, African governments can significantly reduce fraud, improve tax compliance, and ensure efficient use of public funds. This, in turn, will lead to better governance and increased public trust, according to Augustus.
“Government procurement processes can be managed using smart contracts, ensuring that contracts are awarded and executed based on predefined criteria. Also, blockchain can be used to track the supply chain of goods and services procured by the government, ensuring that there is no misreporting in the supply chain,” he said.
These automated contracts ensure that all parties compete fairly and that the most suitable vendor is selected while allowing for proper tracking along the supply chain. They also ensure that goods and services are delivered as specified and prevent fraud and misreporting. According to Augustus, governments must prepare for the downsides of this innovation, including data privacy issues, environmental effects, and resistance to change. He added that they can mitigate these challenges by investing in technical expertise, creating robust legal frameworks, and ensuring that the transition to blockchain is inclusive and sustainable.
