17 December 2017

Kenya: Blockchain Technology to Weed Out Land Brokers

Long queues and endless paperwork during land transfers have discouraged many people from following the processes at registries, making them opt for brokers and advocates to handle the process.

The pair, however, usually take advantage of the situation to charge high fees, while some of their transactions are fraudulent.

But this could change if Kenya introduces blockchain technology. The process will help link an individual's land/property with his or her details.

Since it is a digital database distributed across a network of computers, the records will be protected by codes (cryptography), which will be free from human error, editing or removal.

Kenya can take a cue from developed countries which have taken that route.

Since last year, players in the technology sector have been exploring the application of blockchain beyond virtual currencies.

The technology can document clear ownership and transfer footprints, weeding out cases of fraud.

Locally, the government in December 2016 said it was running pilot projects to keep track of educational records and land transactions.

"This will not only increase security but will also help fight corruption by distributing the maintenance of records to all parties involved, rather than to a few. By allowing participants to see who owns, sells, and divides land, the technology will enhance verification and transparency," said Mr Lyford-Smith, technical manager, Institute of Chartered Accountants in England and Wales (ICAEW).

The institute, a United Kingdom-based accountant's body, is a founder member of the Chartered Accountants Worldwide and the Global Accounting Alliance.

It said that blockchain can increase efficiency in land registry.

In its latest report, Blockchain and the Future of Accountancy, the institute says the land registry, for example, can benefit from this technology, especially in provenance and transfer of ownership of assets.

"The technology can create a clear and permanent record of ownership and transfer of ownership, which can facilitate additional liquidity in the economy," said Mr Lyford-Smith.

The report highlights experiments done in Sweden, Honduras and Georgia on how to use blockchain to digitise title deeds and reduce property fraud.

It says that in Honduras, blockchain could help weed out corruption with tamper-proof land title deeds, while in Georgia, the government has worked with blockchain start-up BitFury to implement a blockchain-based system for land registries.

With land cartels conning innocent Kenyans, experts feel the government should take a leaf from these countries.

They say that the confidence of Kenyans in the sanctity of title deeds and security of tenure has been eroded.

The ICAEW reports notes that a land registry blockchain would have to start by tokenising the land assets in question -- that is, creating a representation of each section of land as a legally-equivalent digital asset, stored on the blockchain.

The report says this would be followed by making sure that the present owners have the appropriate tokens assigned to them.

It, however, notes that this is no small undertaking, as the existing systems are already very complex.

Two weeks ago, the Ministry of Lands and Physical Planning upgraded its electronic management system to ease the processing of transactions, a move that will see all the required fees and duties paid online through the ecitizen portal.

"For your land to be listed on the 'manage property' page, you are required to validate it with your local land registry with your original title or certificate of lease, your original Identity Card (ID) and Kenya Revenue Authority pin during working hours," said Lands principal secretary Nicholas Muraguri.

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