Blockchain creates more transparency in development cooperation

On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW is testing the use of blockchain technology in the management of public finances in Burkina Faso. The potential of this technology for development cooperation in Africa will be explored during a six-month pilot phase.

The TruBudget software developed by KfW makes it possible to trace all work and approval steps. This includes, for example, drafting contracts or tendering and disbursement processes in the implementation of a project, for example in the field of water supply. Using the platform, all participants can view all processes and changes in real time. Complex manual processes to ensure that funds are used correctly can thus be eliminated.

International donors often set up parallel structures as a response to risks and lack of implementation capacities in partner countries. The associated transaction costs of this strategy are very high for both sides, however.

“The independent development of a country is much easier if investments are implemented through its own budget rather than through donor project budgets. With TruBudget we create transparency for the benefit of all parties involved and enable donors to deploy funds safely and directly via the structures of the partner country,” explained Prof. Dr. Joachim Nagel, Member of the Executive Board of KfW Group.

The Burkinabe Ministry of Finance is supported by the consulting companies BearingPoint and Accenture in the development and testing of a Burkinabe TruBudget platform. The software was developed according to the open source principle and will be available to interested partners free of charge.

“Accenture strives to ensure that blockchain technology can be used to transform business processes so that we can generate the maximum added value for our customers and their communities. This example perfectly demonstrates how to tap into the potential of blockchain,” explains Karsten Ebersbach, managing director at Accenture. “In cooperation with KfW, we have designed, tested and implemented a solution that cultivates the transparency that is so urgently needed in development cooperation.”

Original source: KfW
Published on 17 December 2018