IOTA Foundation, a non-profit foundation focused on distributed ledger technology (DLT) and open-source ecosystem development, announced today a partnership with TradeMark Africa (TMA). The goal of the partnership is to help TMA in its mission to improve East African trade and global competitiveness using IOTA’s distributed ledger technology. TMA works closely with the East African community institutions, national governments, the private sector and civil society organizations to increase trade by reducing current barriers and by improving business competitiveness.

Currently, Africa has vast, unlocked potential that has not yet been realized, due to its lack of physical and digital trading infrastructure. This greatly affects the economic prosperity of the continent. TMA’s goal is to increase trade by improving the trade system in East Africa, leading to an enhanced economy and a reduction in poverty, particularly in sectors and geographic areas that depend on international trade. In order to take advantage of trade opportunities, the private sector in Eastern Africa must produce safe and competitive goods on time for its customers.

“It is key to us that introducing new technologies is not a lock-in but puts the control into the hands of the government and the traders. Public infrastructure must avoid any potential to monopolize the control or the data with a few private actors – and give value to all actors independent of size. This partnership provides us access to a technology where we can test the value of decentralized data management and have control mechanisms of the underlying infrastructure. Equally important, it provides training of staff and local developers in East Africa,” said Alban Odhiambo, Senior Director, Trade Environment, TradeMark Africa

One of the major barriers to trade is the complex paper-based, cross-border processes, which results in over 1 trillion lost globally on an annual basis. This is often a result of the lack of a trust relationship between an issuer of a paper document in the exporting country and the customs authority in the importing country. The current inefficient processing of the enormous amounts of information and verification on products, along with food delays denies growth to individuals, companies, and countries that are attempting to expand their economies.

The IOTA digital ledger technology can greatly improve the process of getting goods to their market destinations through a transparent and verifiable chain of custody. The Tangle, IOTA’s underlying data infrastructure, enables that details, trade certificates, events and specifications of manufactured products and food supply chains can be trusted and shared along the value chain. It introduces new ways to automate today’s often archaic trade system.

“ One of the most compelling features is the low-cost approach for such high-value public infrastructure. Not only are the building costs low due to the open-source, feeless nature of the IOTA technology, but it is also an uncomplicated addition to the existing infrastructure. No miners or other fees exist on the transactions, so long-term costs are predictable, low and well-suited for the volumes of international trade,” said Jens Lund-Nielsen, Head of Supply Chain and Global Trade, IOTA Foundation.

The information in the Tangle is immutable and its integrity guaranteed. The standardization of data transfers enabled by the technology increases the trust of bureaucratic checkpoints and instills confidence for customers and end-users regarding the integrity of the imported and exported products. The scalability and embedded encryption of the Tangle is well-suited for the millions of transactions and ensures that each trader remains in control of their own data. It is a critical digital infrastructure that can further support the economic growth in emerging economies, like East Africa.

Source: AP News

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.