$ 400 million in blockchain transactions: OCP achieves an African feat

$ 400 million in blockchain transactions: OCP achieves an African feat
$ 400 million in blockchain transactions: OCP achieves an African feat

In terms of the use of disruptive technology in industry and agriculture, OCP is performing well. Indeed, the Group and the Trade and Development Bank of East and Southern Africa (Trade and Development Bank – TDB) have just revealed that $ 400 million in commercial transactions were carried out via blockchain technology specifying that $ 270 million has already been executed, with the remainder planned for the next few months. As a result, several thousand tonnes of fertilizer are shipped from Morocco to Ethiopia as part of these transactions.
The details.

Technology at the service of intra-African trade

OCP shifts into high gear and becomes “the first African company to execute an intra-African business transaction using blockchain technology.” This transaction made it possible to finance the shipment of phosphate fertilizers from Morocco to Ethiopia, ”says the company, explaining that this initiative is part of the Group’s digitalization strategy. The objective is to contribute in particular to alleviating the trade financing gap in Africa and to stimulate intra-African trade, in particular in the fertilizer sector, through digital inclusion.
Considerable time savings during a pandemic

The use of digital technology makes it possible to optimize time, especially in this context of Covid-19 where activities are down. From there, the blockchain technology of “dltledgers” offers all stakeholders the possibility of carrying out the transaction digitally and of completing the import-export operation in less than two hours while the equivalent “paper” transactions are typically concluded in three weeks or more because of the time it takes suppliers to transfer physical documents to the buyer through the traditional banking system.
“With the current slowdown in global logistics and supply chains, trade finance transactions can take up to six weeks, due to border and airport closures continuing to cause further delays,” argues the OCP Group adding that in the case of this operation, the parties can download, display, modify and validate the documentation in a private blockchain, simultaneously and in real time. At the same time, this technology has a lower carbon footprint and allows operations to be “more secure thanks to encryption and verification technologies,” notes the company. This technological device also has advantages: more transparency and traceability, and the reduction of risks thanks to the elimination of possible errors and ambiguities in the exchange and modification of documents. It should be noted that these transactions are carried out while global trade is down 5 to 10% in 2020, compared to the previous year and in parallel with the decline in demand for trade finance.

Support from Tarde Developpement Bank

Financially, TDB facilitated “over half a billion dollars in trade finance in Ethiopia in 2020, and supported nearly one billion dollars in fertilizer imports from OCP Group to Ethiopia in over the past three years, ”says OCP. In the same sense, the financial institution simplifies the financing of trade in Ethiopia by providing solutions that meet foreign exchange needs and allow the import of agricultural and energy products including fertilizers, wheat and sugar. At the same time, importing fertilizers increases crop yields and productivity levels, improves food security, increases foreign exchange earnings from cash crops and supports local employment, OCP says. At TDB level, it must be said that in October 2019 the bank became “the first African development financial institution to conclude a trade finance transaction using blockchain technology, by financing the import of 50,000 tonnes of white sugar. from India to the region it serves, ”reports the same source, noting that this transaction served“ as an example for the global trade finance industry, while creating a model that TDB was able to replicate to other transactions such as this intra-African transaction ”.

A winning partnership for Africa

In order to overcome the problems facing the African continent, it is essential to set up intra-African partnerships. An approach that the OCP Group has adopted for several years now to meet the challenge of structured, efficient and sustainable agriculture. “This cooperation is also in line with TDB’s mandate, which aims to promote intra and interregional trade, as well as its integration in the region it serves and on the continent, in line with the actions of AfCFTA (African Continental Free Trade Area) ”, explains the same source. It should be noted that agriculture has a central role in the Ethiopian economy. It has a share reaching 31% of the country’s GDP and represents 66% of its labor market. In this scheme, fertilizers are essential for the development of the sector. Note that nearly half of these products are imported to the OCP Group from Morocco.

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