Mar 31 , 2021
The transaction amount is part of a 400 million dollar deal the OCP Group, a phosphate mining and fertilizer company, has entered with Ethiopia.
A groundbreaking transaction involving 270 million dollars through blockchain involves the shipments of fertilizer from Morocco to Ethiopia.
The transaction amount is part of a 400 million dollar deal the OCP Group, a phosphate mining and fertilizer company, has entered with Ethiopia. Financed with a loan from the Eastern & Southern African Trade and Development Bank (TDB), these transactions are praised as the first intra-African trade transaction using blockchain.
Blockchain is a digital database form of record-keeping that provides secure, private and efficient ledgers for transactions.
A Singapore-based digital platform, dltledgers, is used by OCP Group to deliver phosphate fertilizers to Ethiopia, a country whose 31pc of GDP comes from agriculture and offers 66pc of its population livelihood. The transaction took only two hours, according to a press statement issued by PTA. The Bank has facilitated over half a billion dollars worth of trade finance in Ethiopia last year and supported close to one billion dollars of fertilizer imports from OCP Group to Ethiopia, in the past three years.
Unlike traditional transactions that need to move physical documents from suppliers, through the banking system, to the buyer, transactions in blockchains are instant. The Bank used dtledger’s blockchain technology to let parties in contracts carry out these import-export trades digitally, under two hours, compared to the three weeks it takes to complete. Parties in the transactions can upload, view, edit, and validate the documentation in one private blockchain, simultaneously and in real-time.
The lengthy process was disrupted further by the COVID-19 pandemic, taking up to six weeks to complete, as border and airport closures continue to create additional delays, says the statement.
"This innovative transaction served as an example for the trade finance industry globally, as well as a template, which TDB has since then been able to replicate for further transactions such as this intra-African trade," said a press statement the Bank issued.
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