ID for Development: Opportunities and Challenges for Africa

Alan Gelb and Anna Diofasi ANALYSIS Policy & Development

An official identity is essential for any person to participate in a modern economy and to access basic rights and services. It empowers people to vote, register assets, own bank accounts and travel. Adequate ID systems also help governments to engage with their citizens in a streamlined and efficient manner. National ID (NID) systems are currently in use or under development in at least 150 countries and many are strengthening these systems. Security is one driver for this process, particularly after the events of September 11, 2001. As legal identity is recognized as one of the Sustainable Development Goals for 2015-2030, development is another driver. A third driver is the rapid advances that have been made in digital technology, including biometrics and its incorporation into ID systems. At the same time, in order to realize the full potential of ID programs for development, a number of concerns and policy challenges need to be addressed even as systems are strengthened.

The Trend in Africa

Sub-Saharan Africa (Africa) is no exception to this global trend. At least 23 National Identification (NID) programs or programs of similar type have been introduced since 2000 compared with only 15 in the four prior decades. Many countries are modernizing their systems. This often includes adopting digital biometrics (fingerprints, face and increasingly iris) and issuing ‘smart’ ID cards that enable more accurate user authentication and access to financial transactions as well as other applications. Following the lead of countries like Estonia, which has the world’s most fully developed e-ID system, African countries such as Kenya are starting to move towards e-services and e-government in a more broad sense. With Estonia’s e-ID, citizens almost never need to appear in person at government offices; they can transact and e-sign documents remotely with equivalent legal status as in-person signature.

With growing momentum, the Second Government Forum on Electronic Identity in Africa (ID4Africa) took place this May in Rwanda, following the first Forum in 2015 in Tanzania. It provided an unprecedented opportunity to share experience across the continent: thirty six countries participated together with international experts and industry representatives. The third Forum will take place in Namibia in April 2017. The World Bank has also launched an initiative, ID4D, to provide a more integrated approach to ID issues as they relate to development.

African countries are at different stages in respect to ID systems, which can be assessed from three perspectives: do they issue robust credentials that are unique (each individual has only one identity), difficult to forge and easy to verify against a central data register? Do they cover a large proportion of the population or only a few privileged citizens or those in urban areas? Is the ID system integrated – upstream, into a well-developed civil registry, and downstream, into a wide range of applications, such as voting, KYC requirements for bank and mobile accounts or the payment of pensions and social transfers? The graphic in Figure 1 outlays the African systems as assessed by such criteria. The classifications, although still in a preliminary stage, provide some indication of the diversity of Africa’s systems. Some countries, like South Africa, Botswana and Zimbabwe, have highly developed systems that cover almost all of the relevant population and are used for a wide range of purposes. Others have rudimentary systems or ones that cover only a modest proportion of the population. Despite efforts to expand coverage, Tanzania’s national ID card is only held by about 10% of the adult population.

Why ID? An opportunity around every corner

ID systems can facilitate public programs while saving funds by improving targeting and reducing leakage. Africa has been at the forefront of innovative uses of ID (Gelb and Decker, 2011). Since the mid-1990s, South Africa has used fingerprint-based biometric ATMs, smartcards and bank accounts to deliver pensions and social grants, including to locations with limited connectivity. The system of social grants now covers some 16.5 million people. In the Democratic Republic of Congo, iris technology facilitated disarmament, demobilization and reintegration. Ex-combatants were enrolled in a cash transfer program to help them adjust to civilian life. Following iris scans, 110,000 received an ID card and a PIN which they could use to collect 13 monthly cash payments from over 8,000 airtime sales agents. In rural areas where distribution through vendors proved difficult, mobile teams delivered cash using only iris scans for identification.

Digital ID systems also facilitate the delivery of emergency relief. The Dowa Emergency Cash Transfer (DECT) program in Malawi covered 11,000 rural families; fingerprints were used for initial registration and to verify payments at mobile ATMs in conjunction with smartcards. The program improved recipients’ nutritional and health status but highlighted the cost of creating a special system for each program in the absence of a proper national ID system. Digital ID systems underpin emergency relief in several other countries, for example, programs for refugees in Northern Kenya.

Strong ID can also support financial inclusion. In Kenya, bank, mobile and microfinance account-holders are identified by their national ID numbers. Negative and (more recently) positive credit histories must be shared across the system. Non-financial entities, such as utility companies, may also participate on a reciprocal basis. The result has been a sharp fall in the ratio of non-performing loans, and an increase in the number of credit accounts and information-based financial products.

Strong ID can save governments millions by cutting leakage and corruption. As part of a civil service reform, Nigeria eliminated over 43,000 ghost workers from the public payroll following an audit using biometric identification in 2011; this is reported to have saved the country over $60 million. The largest case of using an advanced ID system to underpin subsidy reform comes from India which eliminated around 40 million “ghost” beneficiaries when it replaced its market subsidy on LPG cylinders by direct bank transfers. The annual saving from this one initiative, at about $1 billion, recoups the entire cost of providing a unique ID number (Aadhaar) to some 830 million people – a figure almost as great as the entire population of sub-Saharan Africa (Gelb and Diofasi, 2015).

Robust ID credentials can also facilitate free movement of persons across Africa’s numerous borders without compromising security. The 15 ECOWAS member states are taking the lead. The Community plans to launch a biometric ID card in 2016 to serve as a travel document in the region (ECOWAS, 2014). In East Africa, Kenya, Uganda and Rwanda have also concluded an agreement to accept national ID credentials for travel among the three countries.

Thinking big: the challenge of scaling up ID programs

African countries, like others, need a strategic approach to ID to maximize its development impact. They confront a number of challenges that call for innovation and coordination, including the design of their ID architecture and ID management, as well as technology and legislative action.Fragmented systems need to be integrated.

When it comes to ID programs, less is often more. Some countries have a multitude of ‘functional’ programs, each developed to serve a particular purpose – voter registration, customer ID for banks and healthcare cards, among others – that coexist with national ID initiatives. Multiple systems drive up costs, hamper interoperability across programs and can also undermine demand for a core system of civil and national registration.

Nigeria provides an example of a need for integration. A 2006 report by the Committee on Harmonization of National Identity Cards identified 12 ongoing ID card projects at the time, including eight with biometric components. Not much progress has been made since then. Even as over 67 million people were registered and issued voter cards in the run-up to its recent elections, as of February 2015, only six million have been enrolled in the country’s national e-ID program. A previous biometric national ID program launched in 2003 registered 37 million citizens but has since been abandoned. The banking system recently launched its own biometric identification program, the bank verification number (BVN), which is required to access all banking services. As of late June 2015, the BVN program had enrolled about 14 million customers from a total of over 28 million. The fragmentation of IDs and associated multiple registrations is not just an inconvenience for citizens, but also a waste of public resources. Nigeria is estimated to have spent as much as $2 billion on ID schemes for a population of 173 million over the last 10 years. This is twice as much as the Aadhaar program has spent to date.

Voter registration offers an opportunity to strengthen national ID systems. Costs for the biometric technology alone can easily reach $5 per voter, making registration a very costly recurring exercise. Investing in voter registration may be popular with political parties as well as foreign donors, but often does not translate into a longer-run investment. If the momentum behind voter ID were harnessed to transform a one-off event into a permanent national ID program based on continuous civil registration, the savings and benefits for all would be substantial.

Civil and birth registration need to be strengthened

In much of Africa, birth registration rates are too low to provide a strong foundation for national ID. Less than 45% of Sub-Saharan African children under the age of five have been registered in contrast to 98% in Central and Eastern Europe, 92% in Latin America and the Caribbean, and over 75% in East Asia (UNICEF, 2014). Birth registration was boosted by providing incentives, using mobile technology and making the process more flexible. South Africa linked registration to the provision of child support grants. Uganda piloted the use of mobile technology for birth registration as part of an EU-UNICEF program, which has led to entire villages and hospital settings moving from negligible birth registration rates to almost 100% coverage; the program has been extended to Mozambique and Burkina Faso . In Kenya, the MOVE-IT program uses health workers to report births that can then be registered by the local offices of the civil registry.

Countries are increasingly promoting a cradle-to-grave approach to ID, where the unique identification number is issued at birth. In Argentina, for example, after issue at birth, the NID is first updated between the ages of five and eight with a photo and a thumbprint and updated again after age 14. When the civil registry covers only a fraction of the population – as is the case in much of Africa – determining true identity at the age of 16-18 can be more difficult.

ID must be financially sustainable

Basing an ID program in continuous civil registration and its integration across applications is vital to bringing down costs and ensuring that the program is financially sustainable. Interoperability should be a primary concern when developing a harmonized ID infrastructure and as new applications are added, countries need to be aware of the risk of lock-in to proprietary vendor hardware or software that can inflate long-term operating costs and reduce flexibility. The more widely the ID is used, the greater the potential cost-recovery. Pakistan’s ID agency, NADRA, covers its operating costs from revenues and cross-subsidizes the provision of the basic ID from the fees levied for more sophisticated services. Rwanda follows a similar approach, charging more for drivers’ licenses and passports than for basic national ID.

ID programs must be inclusive

Strong identification can facilitate inclusion but can also be a mechanism for exclusion. There are over 720,000 formerly stateless persons in Africa – a number that is underpinned by exclusionary nationality laws, but many other people have unclear national status. Over 20 countries have no provisions regarding a child’s right to nationality or a path to citizenship for those with foreign-born parents (Manby, 2010) and only a handful of African countries automatically confer citizenship from birth to those born on their territory. Several countries still grant greater rights to men than women to pass citizenship to their children or spouses. Citizenship by naturalization is often almost impossible to obtain in practice and many countries allow naturalized citizenship to be withdrawn on arbitrary grounds. Half of Africa’s states even allow revocation of a person’s birth nationality.

Strengthening NID programs therefore risks formalizing exclusion, leaving many long-term residents, their children and even their grandchildren permanently stateless. Recognizing the increasing risk of marginalization, the African Union has called for a Convention on African Nationality in its report “The Right to a Nationality in Africa” (ACHPR, 2014). This is an urgent problem that, if left unattended, could greatly complicate the process of formalizing nationality in Africa.

Action is needed to protect personal data and privacy

National ID programs do not themselves need to collect and store large volumes of personal data, but the use of a common number facilitates the integration of other databases such as those dealing with medical records or financial status. The growth of such large databases raises concern over data security and data privacy, and misuse of data by the government or private entities. African countries lag in this area – as of 2015, only 14 countries had adopted laws providing a framework for data privacy (O’Donoghue, 2015). However, many are catching up: seven African countries are considering the implementation of data protection bills. The number is expected to continue to increase as countries accede to the African Union Convention on Cyber Security and Personal Data Protection (2014).

Conclusion

Worldwide, many developing countries are making investments in their ID systems, seeking to create a stronger foundation for development policies and programs. African countries have implemented a number of successful ID programs, making use of digital technologies to reform the delivery of social grants, manage government payrolls and facilitate access to credit. The lessons learned from these success stories point to the need for a strategic approach at the country level to ensure that systems are cost-effective, inclusive, and ready to provide a foundation for e-government and the e-economy. Coordination between national programs can help produce region-wide benefits through increased opportunities for cross-border trade, employment and travel. At the same time, the formalization of legal identity raises a number of urgent policy and implementation issues that will need to be addressed if Africans are to reap the full benefit.

Written by

Alan Gelb is a Senior Fellow at the Centre for Global Development. His recent research includes the development applications of biometric ID technology, aid and development outcomes and the special development challenges of resource-rich countries. He was previously Director of Development Policy at the World Bank and Chief Economist for the Bank's Africa Region. He holds a D Phil from Oxford.   Anna Diofasi is a researcher at the Centre for Global development, where she works with Founding President Nancy Birdsall and Senior Fellow Alan Gelb. Her recent research includes the use of biometric ID technology in elections, the provision of global public goods and the analysis of cross-country differences in price levels. She holds an MA in Public Policy from Georgetown University and a BA from the University of Warwick.