Ghana: Implementing the World's First Biometric Banking System

Peruvian economist Hernando de Soto has always argued that the major problem facing the developing world is how to convert its "dead capital"-- i.e. the poor entreprenuers whose economic activity, estimated at US$ 10 trillion worldwide, flow outside the legal system as undocumented activity thus inassessible data, which prevents them from leveraging their capital inside the legal system and from engaging in the kind of wealth creation activities such as access to credit, the issue of shares, the mortgage of property, and a host of other economic activities that drive a modern market economies.

In the article The World's First Biometric Money: Ghana's e-Zwich and the Contemporary Influence of South African Biometrics (Africa: The Journal of the International African Institute - Volume 80, Number 4, 2010, pp. 642-662, accessed IMTFI PDF)...



... Keith Breckenridge looks at Ghana's adoption of the world’s first biometric banking system--basically a void card enabled by the cardholder's fingerprint--to draw a larger proportion of the population into the banking economy, raise the levels of local capitalization by drawing a much larger portion of the issued money supply into bank accounts, create a national instrument and measure of capital accumulation "in the face of a host of established informal and transnational practices that make a mockery of the post-colonial state’s ability to influence and tax the economy." He argues that besides all of implementation road bumps, the scheme might actually succeed. Excerpt:

There is certainly much that seems strange about the Ghanaian e-Zwich project. It is difficult to believe that a country that had no meaningful credit card system, no reliable electricity supply, or even street addresses will be the first to implement a biometric payment infrastructure. Yet in an important sense it is the absence of a preexisting system of payments that makes it possible for Ghana to move its entire banking sector on to Net1’s biometric standard. As that company’s Brenda Stewart observed, ‘Ghana has been able to take up the world-first initiative because it has no Visa or MasterCard infrastructure in place’ (du Toit 2008). In this, at least, the idea of leapfrogging (which recurs almost continuously in African discussions of biometrics) has a kind of power. The new smartcard and cellular networking and biometric technologies will, I think, equip African states with new tools to capture and order the economic activity that has long sought to escape central power, but the outcome of this struggle is clearly a long way off.