Blockchain Could End Public Sector Corruption

With the rise in blockchain support and implementation within the fintech industry, a growing consensus among major industry figures claims that blockchain could be the requisite tool to combat corruption extant within the public sector.


Each year in South Africa billions worth of rand, their fiat currency, vanish as a result of major acts of corruption taking place in the process of public procurement. As a result, DLT and blockchain tech offers a new solution with digital assets such as bitcoin. This technology synchronizes online transactions from independent sources that do not require independent validation. As a result, it promotes a secure method of exchange in a decentralized manner cutting out entities such as government or central bank authorities.

Promoting Transparency, Security, and Traceability

According to Stellenbosch University’s Sope Williams-Elegbehe, the use of blockchain technology within public procurement can improve efficiency, transparency, and reduce disputes. She explained this in detail during a university lecture last month.

In addition, blockchain technology has also been supported by the Reserve Bank through their Khokha project conducted earlier this year. The trial successfully carried out interbank transactions using DLT. Williams-Elegbe noted that other than social programs and grants, public procurement is a major expense for the government. She stated that South Africa spends 800 billion Rand each year on procurement in which a whopping 50% is consistently lost due to corruption. Recently, auditor reports claim an increasing rate of fraudulent activity is linked to funds directed towards procurement which could be mitigated if not solved through the use of blockchain technology.

Williams-Elegbe stated that blockchain offers both a decentralized and digital form of transactions for public information. It facilitates consistency by recording all data across the network identically. With such consistency, tampering with information is deterred and is impossible to achieve without all parties participating in the alteration.

According to the Chief Executive Officer of In2IT, Saurabh Kumar, blockchain creates a digital record that is encoded and securely stored across various computers within the public and private network enforcing increased transparency in addition to adding a layer of accountability. With this increased visibility of public records, misconduct is significantly reduced and everything is made easier to audit.

Kumar explained that this system has been trialed by Ghana through a project that uploaded records regarding registration for land ownership along a blockchain. The nature of blockchain and its structure stands against corruption and facilitates transparency, security, and reduces the need for middlemen. Despite the need for legal policies and physical alterations needed to implement blockchain technology, it presents a variety of advantages over the existing system particularly in the form of data management within the public sector, making information instantly visible and traceable for all network participants. In addition, the use of timestamps helps promote security and facilitates the ease of auditing.  

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