Kenya Aims to Transform Its Housing Project With the Help of Blockchain Technology

By Hermione Daguin


The Kenyan government announced its plans to use blockchain technology in its most recent housing project. The government is set to build about 500,000 affordable housing units. These units will be in the cost range for the majority of the population, who are currently living in rental homes. These people earn less than Sh100,000 (USD $992) per month which means they cannot afford mortgages on top of their other responsibilities.

The project will be financed by National Housing Fund under the Finance Act 2018. Employees and employers will give 1.5 percent of their salaries towards the project. Another equal percentage will come from borrowings and investors. According to Housing and Urban Development PS Charles Hinga, the fund aims to raise Sh55 billion a year to buy supplies for the houses.

Despite the carefully crafted plans, the housing government is aware of the citizens’ lack of trust. This is due to previous scandals, namely National Youth Service scandals I and II where forty civil servants and fourteen private sector officials were arrested for looting about $78 millions from the project’s case. Blockchain is meant to serve as a security measure to ensure that something similar does not happen again.

Blockchain technology will also be used to manage and secure the distribution of the housing to deserving participants. The government hopes that it will address the issues of fraud from both legislators and beneficiaries. It will provide much needed transparency and efficiency in the public sector. It will make it easier to ensure that only the rightful owners are living in the government funded houses.

In order to see this latest development in the best light, it’s worth noting that this is not the first attempt made by the Kenyan government to utilize blockchain technology in its projects. Previously, Kenyan Distributed Ledgers and Artificial Intelligence task force chairman, Bitange Ndemo, had argued in favor of a tokenized economy instead of Kenyan Shillings. Ndemo believed that using cryptocurrencies can help to deal with the increasing rates of corruption and it would mean fewer resources spent on printing currencies.

There was even a network of blockchain-based community currencies that was started by non-profit foundation Grassroots Economics and Bancor. However, despite all the efforts to incorporate blockchain and cryptocurrencies in Kenya, the Central Bank of Kenya (CBK) continues to warn citizens and banks against engaging in crypto related activities. Therefore, the new housing project may turns out to be another dead blockchain project.

It doesn’t mean that the project doesn’t have potential. Building affordable housing for people who can’t afford it will help the community. The question rests in the implementation of blockchain technology. Lately many other countries like India, Israel, and Venezuela have been announcing plans to use blockchain technology. Kenya may very well be another one and that’s great news for blockchain.

However, all of these countries have the same love-hate relationship with crypto. While they’re attempting to tiptoe in the market, none of them are willing to dive in. They’re all still wary of the crypto market and continue to warn off their citizens. So, there’s no guarantee for the crypto market for any of these countries. They all want to individualize the technology. They want the advantages that blockchain technologies provide without being part of the world market that’s full of risks.