KfW development bank is testing a block chain for development aid.

Since one of the aims of this blog is to simplify things, I’ll explain what KfW and the block chain are, then the first sentence above can make some sense.

So here is the breakdown.

Kfw (The German Reconstruction Credit Institute) which was formed as part of the Marshal plan after the second world war now has a development bank that provides aid to developing countries. The United States used it as an instrument to provide money for the reconstruction of Western Europe after the Second World War.

The blockchain is (in the simplest way possible) a means to ensure secure, verifiable payments which are permanent. Once entered, it cannot be altered. Also, they are public and accessible to anyone. Many have referred to it as the public ledger.

So what is the connection between these two and why?

For several years, donor countries have been burdened with the question of accountability in money released for projects. Beneficiaries of these aids have claimed monies were not received or were received after going through several pipelines which reduce its value by the time it arrives at its final destination.

To solve this problem, KfW thought, how about we create a system that allows everyone to see who is getting what and when?

But hold on? Isn’t that top confidential information?

Well, the aim is to change that status quo. If a contractor or a government is getting money for the development of a region, everyone has a right to know how that money is being spent. Maybe not to the thorough detail but there is at least a knowledge of what was received.

What then makes this so exciting? (well for me)


Transparency is one factor KfW believes can help deal with corruption. Think about it, aren’t people better behaved when they are aware they are being monitored?

What this means for a man in remote Africa is that with an internet connection, he knows what was allocated for a project in his community and have as many details as was entered into the blockchain system.


That is how I see it. To that young man who would have otherwise never even heard of the aid talkless of the implementation of the project, he will be given the power to ask, to question and to demand accountability.

A lot of investment is going into energy for Africa at the moment and it would be nice to see in clear print what the dynamics are.

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