Digital Trade Key To Unlocking Africa’s Economic Potential

FG Expects $40bn Investment in Digital Infrastructure by 2025

Digitalization brings new opportunities in trade and creates the potential to underpin resilience in times of crisis. The digital transformation of African customs and borders could improve efficiencies in processes and yield trade gains on the continent of $20 billion a year.

With digital trade in place, pre-existing bottlenecks in infrastructure can be tackled, efficiencies can be leveraged, and Innovative solutions can be harnessed. However, countries in Africa vary greatly in their readiness for digital trade.

In African countries, economic resilience must be fostered, jobs must be created, entrepreneurship must be facilitated, and digital trade must be in full swing.

How digital automation is easing the flow of trade

Thanks to technological advances, importing and exporting goods and services in Nigeria has become easier thanks to the rise of online international trade administration portals. These online portals automate the experience for many stakeholders, including customs officials, businesses importing finished goods and raw materials for manufacturing, and those exporting their goods across the globe.

Blockchain technology, Artificial Intelligence (AI), state-of-the-art payment solutions, fraud detection and prevention, and warehouse management solutions are helping to increase the ease of trade, streamline border management, and identify and potentially overcome issues that impact timeframes, logistics and transportation.

Using a platform of this type, such as Webb Fontaine’s Single Window for Trade, provides clients with a wide spectrum of up-to-the-minute information, including trade formalities, import and export procedures, latest tariff codes and rates, as well as fee simulation features. Businesses can fill in pre-arrival applications, official documents (such as Customs declarations, permits and licenses), applications, and manifests while ensuring all fees and taxes are taken care of through e-payment functionality on the same site.

Single Window can cross-check credentials for consistency and traceability as a transactional portal and data collector, reducing errors and fraud. The status of ongoing document processing can be viewed in the Single Window at any time, including on mobile devices.

Ensuring the flow of trade against any challenge

Trade’s digital automation has proven to be a valuable safeguard under the harshest conditions. During the COVID-19 pandemic, many industry experts predicted a downturn in fortunes for the import and export industry due to the effects of global lockdowns on supply chains. Through the leveraging of import/export platforms such as Single Window, Nigeria was able to weather this storm as operations continued unabated.

While many borders were closed, Nigeria’s ports remained open. Thanks to customs operations running through online trade platforms, the national lockdown had no negative impact on import/export revenue collection. The Nigerian Customs Service (NCS) recorded a record revenue raise, generating 1.5 trillion Naira  – its highest revenue generated in a year. Not only was this a testament to the positive impact digital transformation and automation have had on NCS operations, but it also inspired other agencies to seek automation and digitization. It also made it clear to the Federal Government that more could be done, setting the NCS a target of 3.01 trillion nairas in revenue collections in 2022.  

The flexibility afforded by digital import/export platforms has increased SMEs’ agility across the continent. The platforms are easy to use, and customs officials and traders are empowered to operate from any location if they have access to a PC, mobile phone, and internet connection.

How digital trade platforms are giving SMEs the advantage

One of the many lessons from the pandemic is that SMEs need to embrace digital transformation, not just to weather unplanned challenges but because it will help them be more competitive and stable. Digital enablement is not just a means of survival; it is a way for SMEs to conduct business more efficiently, empowering them to expand their operations and earnings further.

Being nimbler than their big business counterparts, SMEs can quickly rethink their marketing strategies and adopt new technologies to enhance their offerings faster. Digital innovation provides extraordinary opportunities for SMEs. It empowers them to implement new market models, has a greater line of sight across their business, improves traceability, and meets their customers, service providers, and logistics partners, in many instances, all on the same page.

In the digital trading space, solutions such as import/export platforms, automated cargo-tracking and digital reporting of non-tariff barriers can significantly provide efficient cross-border trade levelling the playing field for SMEs. This, in turn, is good for the customers and communities they serve and the continent’s economic growth on a wider scale. This growth stimulation is crucial as African SMEs are well positioned to resolve some of Africa’s most critical challenges by creating much-needed jobs, products, and services.

Presence in Africa

The success stories of these import/export platforms have led to their increased usage across Africa. Webb Fontaine, for example, has seen them used by customs departments and businesses in Benin, Congo, Cote d’Ivoire, Ethiopia, Ghana, Niger, Nigeria and Guinea. As more countries and enterprises embrace automation, the potential for their growth through trade expands.

The digital automation of trade processes can play a crucial part in levelling the playing field for African nations in international trade. Whether moving goods through ports or airports, technology has a proven track record of making operations smoother and easier to run. It is something all businesses and governments should embrace if countries on the continent are to realize their potential for economic growth as investment hubs.

By Ope Babalola


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