The role of tech innovations in trade development

AT this year’s World Trade Organisation Public Forum 2022 in Geneva, harnessing technology and digital innovation to advance trade and sustainable development in Africa was extensively discussed.

As it is well believed, technology is the anchor of digital innovation, and is necessary for economic growth and development. This is clear in recent technological innovations facilitating trade, expanding quality education, and allowing access to capital for the society’s poorest. The internet, mobile money, satellite data and imagery, machine learning, and blockchain are some of the technologies advancing progress in our society today. There is also trade tech, leveraging the internet of things (IOT), artificial intelligence, 5G, cloud-based platforms, and other Fourth Industrial Revolution (4IR) technologies to improve processes in digitising global trade and trade finance.

About 113 countries used real-time information technology at scale in 2020 alone, according to UNICEF’S Information and Communication Technology Division (ICTD), and these countries make up 75 percent of world nations, including African nations. Innovators within the continent are using technology to solve various challenges, from cross-border payments to healthcare delivery, financial access, agriculture, and logistics. Doubtless, Africa is improving in using technology for development (T4D), thanks to the brilliant young Africans rising to the occasion. Still, to achieve more with T4D, African governments need to support and not hinder these innovations. Looking at ways African countries can harness technology to boost trade and ensure sustainable development, improve internet access and open data becomes imperative.

As of December 2021, Africa had over 590 million internet users. Although internet penetration has been increasing in recent years, only 42 percent of the continent’s population is active users. This shows that improving internet penetration will make international trade and other activities seamless for consumers, producers, and investors.

Also, as of May 2022, over 12 nations have rolled out 5G on the continent. Although many of these nations face teething problems, some analysts predict that 5G will add $2.2 trillion to Africa’s economy by 2034. African governments are upbeat about using 5G to do large-scale farming using drones, plug into the metaverse, introduce selfdirected cars and machinery, activate smart homes, and improve cybersecurity. Asides from these areas, 5G technology can also enable port systems the needed capacity to process data and aid the interconnectivity of port operations.

Furthermore, broader internet coverage can solve trade blind-spot challenges, enabling rural and urban locations to connect easily and facilitate trade activities. There is a need for uninterrupted internet connectivity, as this will enhance digital trade on the continent. But, the continent must continue to invest in the required infrastructure to strengthen internet penetration.

The Internet of Things (IOT) are innovations that enable physical objects to have processing ability made possible by sensors, software, and other technologies that connect and exchange data with other devices and systems. IOT can improve trade terminal operations systems for cargo shipping and payment, port logistics systems for cargo call-up and transportation, and automatic identification systems for cargoes and containers. It can also enhance delivery tracking from producer to consumer. These are some of the ways digital and technology systems are used in the maritime industry, and we can replicate these innovations in Africa’s maritime sector to boost trade within the continent.

Also, with the aid of AI, automated vehicles can serve as logistics solutions for transferring cargo to dry docks, warehouses, and end users. All these can enable swift business decisions and prevent shortages.

Blockchain technology enables real-time tracking and management of logistics activities, including asset locations within the supply chain. It also ensures the safe sharing of data among related parties. This technology is already being operated in the Port of Busan, the largest port in South Korea, using the Chain Portal system to control vehicle booking, inter-terminal transport, and monitoring system.

African trade systems can have an enterprise blockchain to facilitate connectivity and trusted data exchange between business ecosystems. We believe adopting this for trading activities will enable smart automation and process optimisation in ways that make data available in a distributed, verified, and secure way. For example, Nigeria introduced the National Single Window concept in 2006 to enable goods’ swift and efficient movement at the ports. Although it is yet to fully implement the system, the nation has started the process. It will deploy scanners to improve cargo turnaround time and promote efficiency and transparency at the seaports. When done like in Ghana, Togo, and Senegal, this platform can accommodate blockchain technology. A blockchain-powered supply chain can also aid in the systematic documentation of shipment, transaction records, date, location, quality, and certification of goods to improve transparency and accountability in African trade.

Cross-border payment has been a challenge for intraafrica trade, and despite the rise of Fintech companies, this issue remains. However, with the launch of the Pan-african Payment and Settlement System (PAPSS), a centralised cross-border financial system was created to enable payment transactions across the continent. It looks like a solution has come in that area, even though the adoption has been slow.

A seamless payment system is the backbone of trade. Unlike the European Union (EU), which has a single currency, Africa has 41 currencies. It therefore needs an efficient and functioning payment system like PAPSS to effectively facilitate international or regional trade.

We also believe that Africa is the new frontier, therefore, it is in its interest for policymakers and stakeholders to prioritise using technology and digital innovation to create solutions that will improve trade and sustainable development.

We also believe that Africa is the new frontier, therefore, it is in its interest for policymakers and stakeholders to prioritise using technology and digital innovation to create solutions that will improve trade and sustainable development