Ghana turns to blockchain for land registry and management

The Ghanaian government is on course to achieve a first for an African country after it announced the start of a process to digitize the land registration and management practice.

Presenting the country’s National Budget for the coming year, Finance Minister, Ken Ofori touted the potential of this technology when it comes to improving transparency and accountability where land transactions are concerned. According to the budget statement:

Disputes on land ownership are prevalent and discourage investments due to multiple sales, poor recordkeeping and missing records despite all the efforts (time and money) at land reforms. The digitization of land registry with the use of block-chain technology is intended to deal comprehensively with the problem.”

This statement by the Ghanaian finance ministry suggests a deep understanding of the technology and how this can used to good effect.

The blockchain technology has many use cases and governments, which have hitherto been reluctant to embrace this, are now having second thoughts as recent developments show. For instance, the Chinese government recently signaled its intention to employ this technology in a new way while much closer to home, the Lesotho government has just announced it will be adopting the blockchain as part of its information technology policy.

In fact, a number of governments are working on different projects that seek to harness the many aspects of this technology.

Why blockchain

Meanwhile, Ghana’s decision means the country will in the near future be able to eliminate corrupt practices commonly associated with land acquisition and conveyancing.  According the budget statement, Ghana’s land registry and records is in shambles and this allows criminals to sell immovable property with fraudulent documents.

In some African countries, individuals have amassed wealth by exploiting weaknesses of the record keeping to con unsuspecting buyers.

The so-called land barons are able to sell the same piece of land several times to different buyers without getting caught because the official verification process is often cumbersome, slow and in many cases it is outdated.

With the blockchain technology however, property holders could (or must) digitally prove and transfer ownership immediately without the need to pay and wait for third-party verification.

The blockchain eliminates the moribund deeds office while infusing trust and transparency in the transfer of land ownership. Funds of sender and recipient can be logged using the multisig technology and be triggered upon smart contract execution i.e. transfer a land title when funds are received.

A “digital ownership certificate” cannot be replicated, and can be linked to one property in the system, making selling or advertising properties you don’t own almost impossible. No further middlemen, paper work or delays will be necessary. Therefore the digitizing land registration not only reduces the costs involved but also eliminates the possibility of fraud.

Creation of unique digital IDs for real estate assets, buyers and sellers will enable a faster mortgage process and the transfer of ownership. For the buyer, credit history and income could be instantly verifiable, avoiding time-consuming tasks involving banks, lawyers and estate agents.

Homeowners can prove ownership and time of residence within a property. For assets, digital identities could be assigned, which would include the chain of ownership, list of repairs etc.

The blockchain enhances transparency, which in turn reduces risks and costs for financiers and homeowners respectively. Land barons will be swiftly identified and nailed.

Blockchain technology can be used in other areas where transparency is vital especially with voter registers and the management of elections.

Cryptocurrency resistance

Governments are seemingly interested in the different use cases of the blockchain other than that of currency. Cryptocurrencies are still seen as an affront and efforts to stop these are ongoing at a global level and African countries are also getting in on the act.

For example, a South African financial institution, FNB recently announced it was ending support for cryptocurrency exchanges that had dealings with it. FNB cited the lack or regulation as well as the risks associated with cryptocurrencies as reasons for its decision. The financial institution said:

FNB considers this to be a prudent course of action following a comprehensive review of the potential risks currently associated with these entities, particularly given that appropriate regulatory frameworks are not yet in place.”

According South African media reports however, FNB refused to comment when asked if the decision was made due to pressure from the central bank or if this was a response to the possible competitive threat that cryptocurrencies pose to the banking sector in the long term.

So far the FNB decision appears to be an isolated case as other financial institutions are yet to make a similar decision.

Before the move by FNB, the Central Bank of Tanzania (BoT) had issued a statement warning citizens of that country about the risks of dealing with cryptocurrencies. BoT argues that cryptocurrencies—which are essentially borderless and immune to censorship—are not legally authorized and thus violate Tanzania’s foreign exchange regulations.

It remains to be seen just how far governments are willing to embrace this technology. However as people become more knowledgeable about this technology it will be harder for institutions like BoT to issue warnings that are not supported by facts.