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Block chain technology multifaceted

09 Jul, 2020 - 00:07 0 Views
Block chain technology multifaceted Block chain technology has immense advantages and it is multifaceted

The Herald

Sitshengisiwe

Ndlovu

The Covid-19 pandemic has forced the AfCFTA secretariat to revisit issues on customs procedures and IPR regulations within the AfCFTA. Covid-19 is the unforeseen disrupter that has accelerated the adoption of technology as countries went into lockdown and closed borders in an effort to contain the global pandemic that has claimed over 400 000 lives.

While Covid-19 was an unforeseen disrupter, the Fourth Industrial Revolution has been lurking in our midst presenting a fusion of the physical, digital and biological worlds through new technologies that also threaten to disrupt every facet of life.

Like any other discipline impacted by technology, trade has been impacted positively by the Fourth Industrial Revolution.

The sooner the economies embrace the cross cutting technologies presented by  the digital era, the better will be the future for most global  economies  including  the  people therein.

Trade in the age of high-end technology should boost economies and create wealth for developing countries.

The invention of  block chain technology  is set to revolutionise the way documents are generated  as it will do away with guarantors through the electronic generation of documents.

Trade intermediaries like banks, inspection companies, government agencies and reputable insurance companies play the role of guarantors on the authenticity of   documents, integrity of customs   declarations, including integrity of parties involved.

International and cross border trade consists of a wide supply chain with numerous documents originating from numerous authorities  so as to facilitate movements of goods including services across borders. This has not only been time consuming but has also promoted fertile ground for rent-seeking opportunities thereby making trade costly and unpredictable.

Research by UNCTAD has recommended the adoption of block chain technology by customs administrations to curb the inherent risk of forged documents that may infiltrate the trade processes. This is because block chain allows the creation of electronic records that are originals and cannot be duplicated or copied.

The ownership of the electronic documents can be passed from a sender to a receiver as originals without any risk of the document becoming a forged document.

The success of Africa’s industrialisation through the AfCFTA is hinged on intra-Africa regional trade with exports as the hallmark of industrialisation. For goods to qualify for preferential treatment within the AfCFTA the goods must meet the criteria as dictated by the rules of origin. If the goods meet the rules of origin a certificate of origin is issued that will be proof that the goods are eligible for preferential treatment.

The certificate of origin will therefore be a crucial   security document within the AfCFTA.

Block chain technology will have to be adopted in the generation of certificates of origin to ensure that only the goods  that have met the rules of origin as set by countries within the AfCFTA  enjoy preferential rates of duty obtaining within the AfCFTA.

When customs administrations migrate to block chain technology it will be logical for   other border agencies such as banks, government departments responsible for controls and insurance companies to also join a similar network. The benefits are immense as there will be increased coordination while trade becomes cost effective, certain and predictable.

Most of all, the flow of revenue to the fiscus will increase as the block chain will pluck off the revenue leakages associated with counterfeit documents.

The agricultural and textile manufacturing sectors will need to invest in the block chain technology as these sectors are pivotal to achieve accelerated industrialisation in Africa.

A United Nations Centre for Trade Facilitation and Electronic Business Block Chain research paper describes how block chain combined with radio frequency ID tags, sensors and internet will enable consumers to know minute details about food products they consume.

The electronic trail will provide transparency to movement of consignments to the extent of identifying the farm, the source of contamination in case of anomalies. The resultant claims from any demeanour within the supply chain will be processed quickly for compensation by insurance companies who will be part of the block chain.

Block chain technology has immense advantages and it is multifaceted, positively impacting all sectors of the economy thereby improving lives of many people.

In the context of trade it will be prudent for countries that have not taken up block chain technology yet, to do so as the fragmented uptake of block chain technology  by member states within AfCFTA may stifle  smooth movement of goods across borders.

Sitshengisiwe Ndlovu president of OWITZIMBABWE: MBA/UNCTAD: Trade and Gender Linkages/ IAC Dip/Cert: Trade in Services and SDGs: Robert Schuman Centre of Advanced Studies/IDEPCert: Making the African Continental Free Trade Agreement Work. She writes in her personal capacity. For more on trade matters visit her blog on website: www.owitzimbabwe.org

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