A state-owned Moroccan fertilizer company has executed a $400 million transaction using blockchain technology, in what it says is a first for intra-African commerce.
In a deal facilitated by the Eastern and Southern African Trade and Development Bank, OCP Group sold phosphate fertilizer exports to Ethiopia using blockchain technology, in a deal worth an initial $270 million. The remaining deals will be executed in the coming months, taking the full transaction value to $400 million, reports Global Trade Review.
Trade finance deals which are typically executed over a matter of weeks can be finalized in hours using blockchain, according to OCP Group. TDB previously used distributed ledger technology to facilitate the export of $22 million worth of sugar from India to Ethiopia. The companies say that the use of blockchain tech simplifies the supply chain process, making it easier to validate documentation and improve transparency.
TDB CEO Admassu Tadesse said the bank has been focused on maintaining liquidity while cross-border trade slowed down due to the COVID-19 pandemic.
“As part of our response to the pandemic, we have been providing liquidity to our clients to curtail cross-border trade and supply chains disruptions, and ultimately, to help our member states continue working towards their development objectives,” Tadesse said.
Tadesse stated that the utility of blockchain technology had made itself known during the logistics slow-down. “With transport logistics slowing down, blockchain has been instrumental in making this happen,” he said.