When Ngozi Okonjo-Iweala became Nigeria’s finance minister 14 years ago, she faced plenty of challenges: corrupt politicians, violent gangs, unpredictable military leaders. But there was one particular headache that she had not anticipated: the curse of “ghost pensioners”. No, this was not a cohort of local spirits. Rather, as Okonjo-Iweala explained recently at a Brookings conference in Aspen, Colorado, the “ghosts” in question were Nigerian crooks who were creating fake identities in order to file benefits claims.
These fraudsters were so brazen and successful — largely because Nigeria’s paper-based record-keeping was so inefficient — that they often carried on claiming multiple benefits for non-existent people for years. Eventually, said Okonjo-Iweala, those “ghost workers” retired to become “ghost pensioners”. Okonjo-Iweala decided to fight back. She corralled $92m in funds from international donors to build a digital record-keeping identity system using customer biometrics.
It took years to build. But when it finally materialised in 2015, she recalled: “We were able to weed out over 65,000 ghost workers, saving the government over $1.1bn in fraudulent payroll costs.” And then something even more significant happened. As the digitisation process gathered pace, it not only knocked out sham claimants but also started to give identities to thousands of real humans who had previously been invisible. Most of us in the west take it for granted that we have an official identity, both in digital life and real life.
We usually only think about it if we are worried that somebody is trying to steal it, or that governments are threatening to breach our privacy. But in the developing world, the idea of having an identity — be that digital or in any other form — is a luxury. It is estimated that some two billion adults around the world do not have a bank account. In emerging markets, some women in particular have no way to independently identify themselves, making it difficult for them to protect their rights, access services or lift themselves out of poverty. “Large numbers of women are unable to take control of their finances because they lack the basic documentation to open a bank account,” Okonjo-Iweala pointed out, noting that around 42 per cent of adult women in developing countries lack a bank account partly because they have no way to show a bank teller (or anyone else) who they are.
According to research carried out by ID2020, a public-private project that’s trying to promote digital identifier systems: “Experts estimate that 1.5 billion people lack any form of officially recognised identification, and that’s one-fifth of the planet.” These tend to be “women and children from the poorest areas of the world”. The United Nations, meanwhile, has declared that one of its sustainable development goals is to provide everybody on the planet with a legal identity by 2030. The good news is that all manner of organisations and groups are now getting involved in the cause.
The World Bank, for example, is working with private-sector bodies including MasterCard to create digital identities using credit platforms. Ajay Banga, MasterCard CEO, is a vocal champion of this campaign, particularly for women (partly, a cynic might suggest, because he hopes this will create a future market). ID2020 is spearheading another non-government initiative, in conjunction with groups such as Accenture and Microsoft. Refugee bodies, including the United Nations Development Programme, are trying to create digital identities for people in camps.
Okonjo-Iweala, in the meantime, is spearheading another initiative: these days she runs Gavi, a global vaccination group. Whenever its health workers immunise children, they also try to create records — the idea being that it is easier to register children via vaccination programmes than through schools or hospitals, let alone a formal government database, so why not use immunisation records as the basis for a digital ID? These efforts are impressive, but numerous challenges remain. In an ideal world it would make sense to have standardised systems for identifying people, in order to ensure that their identities are portable. In reality, however, silos plague the aid sector, and private companies compete to offer rival — proprietary — solutions.
Nevertheless, even if progress is very uneven, it is under way. It may not help all women (or men) any time soon. Nor will it prevent all fraud, least of all in Nigeria. But the next time you type your name and password into your cell phone, ponder what a 21st-century luxury it is to have an identity at your fingertips. And then imagine what might happen if the whole world could identify itself as easily as you do. Technology offers us all some remarkable powers — and not just for rooting out those Nigerian ghosts.
Tett is the U.S. Managing Editor for the Financial Times