Nigeria turns to blockchain to tackle land fraud

Real estate fraud is rampant globally, costing investors trillions yearly as corrupt officials collude with unscrupulous business operators to swindle unsuspecting users. In Africa, the challenge is exacerbated by poor record-keeping and slow arbitration and judicial processes.

Blockchain has long been touted as the ultimate solution to land fraud, and Nigeria’s largest city, Lagos, is finally walking the talk.

According to local publications, the Lagos State government has partnered with a consortium of local tech firms to deploy the blockchain-powered land registry system over the next 18 months.

The system is based on tokenization; users will convert their physical real estate property into a digital representation on a blockchain network with key details such as the title deed, ownership, and transaction histories. Once the land’s ownership changes hands, the changes will be reflected on a transparent and immutable network, making it easier for legitimate buyers to prove ownership.

Lagos joins a handful of other jurisdictions across the continent that have turned to decentralized ledger technology (DLT) to rid the real estate sector of rampant corruption. They include its neighbors Ghana and East Africa’s largest economy, Kenya.

The big difference for Lagos is the government support. In other African countries, it’s the private sector that has championed the transition, which has made it slow and hindered widespread adoption by the public.

Additionally, powerful cartels within the government, who have benefited from the opacity of the paper-based system, have fought against digitization efforts. In Kenya, for instance, the Ministry of Lands estimated that real estate corruption and fraud cost the country Ksh60 billion ($470 million) annually.

In South Africa, the digitization of land titles through blockchain could have an even bigger impact. President Cyril Ramaphosa announced last year that his government’s backlog in processing title deeds exceeds a million households, equating to over R242 billion ($14 billion) in assets.

South Africa’s legacy finance has joined the bandwagon. Big Four bank FNB has been exploring blockchain to help its clients secure e-title deeds, CEO Jacques Celliers said last year.

In addition, Nigeria has continued creating remarkable steps towards digitalization, as seen at the 2023 “Digital Nigeria International Conference.” Members of the BSV ecosystem, like VX Technologies Executive Director of Global Partnerships Dr. Catherine Lephoto and Centbee’s CEO and Co-Founder Lorien Gamaroff, were present on the conference’s center stage, where they discussed the opportunities in adopting blockchain in Nigeria.

“What that specifies for us as Nigerians and as a country is that we want to see wide adoption of blockchain technology in our private and public sector,” Gamaroff told CoinGeek.

UAE welcomes first regulated digital market

Elsewhere, the United Arab Emirates (UAE) welcomed its first regulated digital market after the Abu Dhabi Global Market (ADGM) issued eight licenses to Finstreet.

Finstreet is a subsidiary of Rorix Holdings, which is owned by the International Holding Company (IHC), the second-most valuable conglomerate in the Arab states after Saudi Aramco.

ADGM issued the licenses to three subsidiaries—Finstreet Global Market, Finstreet Global Clearing and Settlement, and Finstreet Capital. They are now registered to offer diverse services, including digital asset trading and custody, private financing, security token trading, and more, underpinned by blockchain infrastructure.

Commenting on the licenses, Finstreet’s Thani bin Ahmed Al Zeyoudi it as “a testament to the UAE’s commitment to embracing technological advancement and enabling inclusive global trade.”

The licensing furthers the UAE’s march towards becoming a global digital asset and blockchain hub. In June, the country’s central bank approved dirham-backed stablecoins to curtail the influence of USD-backed alternatives. Local stablecoins also allow the watchdog to better insulate local investors from global contagion events, such as the historic UST stablecoin crash of 2022.

The Middle Eastern nation has also clarified that block reward mining is legal, while the central bank has pushed on with its CBDC development.

Finstreet is the latest showcase of the pro-digital asset approach, says ADGM chair Ahmed Jasim Al Zaabi.

“This launch not only reinforces our strategic vision of positioning Abu Dhabi at the heart of global finance but also propels economic growth and enhances connectivity across the global marketplace,” he added.

Watch: The future has already arrived in Nigeria