Is digitising the Lands registry enough to curb fraud?

What you need to know:

  • I am not privy to details of the current digitization work, but I’m pretty sure the previous digitisation exercises have not successfully stopped fraudulent transactions that continue to plague our registries.
  • Digitising the Lands registry requires more than putting land titles and their owners online. It must go deeper to address the fundamental question of where we should place the trust to authenticate and validate transactions.
  • There are several key stakeholders that are impacted by land transactions and are therefore good candidates for participating in an automated, consensus type of validation.
  • Without decentralising and distributing the verification and validation process in the Lands ministry, we face the risk of digitising fraud rather than eliminating it.

I’m not sure if I’m the only person who has noticed that the first task each new Lands minister does upon appointment is to shut down the Lands registry in order to carry out some digitisation exercise.

I would start off with a disclaimer by saying that I am not privy to details of the current digitization work, but I’m pretty sure the previous digitisation exercises have not successfully stopped fraudulent transactions that continue to plague our registries.

Those who keep track of global financial scandals will remember the Enron scandal, where auditors helped the multinational to cook its financial books in order to prop up its stock valuation.

Enron financial books were as digitised as any blue chip company would want them to be. But through ‘creative accounting’ or collusion between key actors, they ensured that key financial data regarding their huge debt portfolio was hidden from the public.

UNRELIABILITY OF TRUST

Basically the company was insolvent, but the auditors and accountants propped it up on the stock markets as being very healthy financially. This point illustrates the fact that whereas digitisation improves efficiencies, it is never sufficient to prevent fraudulent activities.

This is because the current models for digitisation or computerisation are based on what is known in technical jargon as ‘Client-Server’ systems. In Client-Server systems, all participants in the digital transactions must place trust in whoever is controlling the main computer or server.

If Akinyi sells land to Biketi, the digitised system would increase efficiency by allowong her to complete the transaction online. However, nothing other than ‘trust’ will stop the personnel who manage the servers at the Lands registry from fraudulently modifying that record to show that Akinyi also sold the same land to Chebet.

DEMOCRATISING TRUST

Effectively, Biketi and Chebet will be holding claim to the same title, but they won’t know about it.

Furthermore, the different banks that each owner will approach for a construction loan by using their title as collateral will also not know about the fraudulent situation occasioned by the ‘trusted’ entity at the ministry of Lands.

This implies that digitising the Lands registry requires more than putting land titles and their owners online. It must go deeper to address the fundamental question of where we should place the trust to authenticate and validate transactions.

Fortunately, there are new technologies that are designed to democratise the trust we have traditionally placed on centralised agencies by re-distributing it across several stakeholders.

Essentially, what this means is that when Akinyi sells her land to Biketi through the digitised system, that transaction will need to go through a democratic process of verification and validation as prescribed by the group of stakeholders.

RAISING INTEGRITY BAR

Each of the stakeholders will therefore independently verify and validate the transaction by running a piece of code that checks if Akinyi is indeed the land owner, and that she is the one who has authorised the sale to a particular buyer.

The transaction is only entered into the Lands registry once all or a majority of the stakeholders are in agreement. This raises the integrity bar in that it would require a majority of stakeholders to fraudulently modify the transaction - as opposed to the current situation where just one of them can execute the fraud.

There are several key stakeholders that are impacted by land transactions and are therefore good candidates for participating in such an automated, consensus-type of validation.

OTHER STAKEHOLDERS

Beyond the Lands ministry, other stakeholders would include the National Lands Commission, the Law Society of Kenya, the banks, the Kenya Revenue Authority, and county governments.

Each of them could be tasked to instal and ran an independent validation node that would participate in the consensus protocol in order to increase the integrity of the land transactions.

Without decentralising and distributing the verification and validation process in the Lands ministry, we face the risk of digitising fraud rather than eliminating it.

Mr Walubengo is a lecturer at Multimedia University of Kenya, Faculty of Computing and IT. Email: [email protected], Twitter: @Jwalu