How will Blockchain boost trade in Africa?

Despite a regional economic slowdown in 2020, over a dozen African countries grew last year. Complicated trade rules and lengthy border processes stifle African economies. These long-standing issues need creative solutions.

Blockchain is becoming more practical and scalable in developing markets. It has just opened a regulatory "sandbox" for innovative blockchain-based goods in Ghana. Standard Bank has joined Marco Polo, a trade financing network. Here are four ways blockchain may help African trade:

1. Customs The AU-EU trade deal is still in its infancy. Traditional customs bureaucracy prevents SMEs from joining global trade networks. This procedure can be automated and simplified, saving time and money.

2. Traceability Tracking cross-border goods correctly is critical for standard and certification verification. Already, blockchain is allowing ethical supply chains for a variety of African goods. Its open-source but secure design makes certificates easy to issue and verify.

3. Electronic payments and trade financing The paper-based method slows both commodities transportation and payment cycle. By removing this barrier, more company owners will be able to trade. In particular, smaller businesses will profit from the reduction in red tape.

4. Equal supply chains Cryptographic transactions enable cross-border commerce and remittances They also allow smallholder farmers and other upstream players without bank accounts to obtain financing. Individual farmers get digital identities and transaction histories via mobile banking. And blockchain-based solutions are not impervious to hacking.

Using technology to facilitate commerce has huge consequences for the world's fastest developing continent. Early users of this decentralized environment will profit tremendously from Africa. Blockchain will be a crucial instrument to help unlock the $3 trillion potential economic benefits of the African trade deal.

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