Morocco’s state-owned OCP Group, the world’s largest phosphate mining and leading fertilizer company, and the Eastern & Southern African Trade and Development Bank (TDB) announced on Tuesday $400 million fertilizer trade finance transactions sealed via blockchain technology.
Some $270 million of this deal have already been completed, while the remaining sum will be finalized in upcoming months.
These transactions make OCP Group the first African company to carry out an intra-African trade operations using blockchain. Through dltledgers’ blockchain platform, OCP Group delivered phosphate fertilizers from Morocco to Ethiopia.
The intra-African transaction initiative, part of OCP’s digitalization strategy, aims to reduce the trade finance gap in Africa and boost trade between African countries, particularly in the fertilizer sector, through digital inclusion.
Dtledger’s blockchain technology makes it possible for all parties to carry out these import-export trades digitally and in under two hours.
Traditional transactions typically take over three weeks to complete due to the need to move physical documents from suppliers, through the banking system, to the buyer. This 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.
Through the blockchain platform, stakeholders are able to upload, view, edit, and validate the documentation in one private blockchain, simultaneously and in real time.
Moreover, blockchain transactions have a lower carbon footprint, and are more secure due to encryption and verification technologies. They also allow for greater transparency and traceability, and reduce risks by eliminating potential errors and ambiguities in the exchange and amendment of documents.