Africa is set to kick off the African Continental Free Trade Area (AfCFTA) project that will promote international trading among member nations. This is similar to what is going on in the Hainan Island, a region in China that is becoming a Free Trade Zone(FTZ).
Just recently, stakeholders in the industry came together in Hainan to discuss on the possibilities of digital technology in the project. Also in attendance was Lucky Uwakwe, the founder of SaBi Exchange, the biggest digital currency exchange in Africa in terms of listed coins. Uwakwe who facilitated the involvement of other key players from the Nigerian government took out time to discuss with Coinstituency on the possibilities that the FTZ will make available in the area of global economic rejuvenation.
What is a Free Trade Zone (FTZ)?
Uwakwe describes the Free Trade Zone as a class of special economic zone, normally within a country or countries. It is a geographical area where goods may be landed, stored, handled, manufactured or reconfigured and re-exported. These will happen under specific customs regulations and generally not subject to customs duty.
The two main parties involved in FTZ agreements are usually the Government and the public or private companies. Uwakwe notes that the major role of the government in such an arrangement is policy creation.
The Hainan FTZ was approved by the Chinese government in 2018. The President then mandated that the province be developed for a complete free trade port with Chinese characteristics of strong development.
He also notes that in the Hainan FTZ, a lot of fourth industrial revolution technologies are being explored. This is something he thinks that other regions like the AfCFTA should emulate. He recognised that in the just concluded conference, blockchain technology was heavily emphasized upon for industrial innovation. The aim of this technology is to speed up construction and development of the free trade port, create Hainan with on-chain Technology, and realize the overtaking of Hainan digital economy industry.
The Hainan free trade port digital economy and blockchain international corporation forum will be one of the few free trade zones of the world with emphasis of fourth industrial revolution technology like blockchain technology
Benefits to Participating Countries
Uwakwe listed some of the benefits for countries that will be participating in the Hainan FTZ project. He also notes that Africa and other regions can emulate this development in order to remain in sync with the ongoing global economic revolution.
Here are the benefits:
- First hand experience on how FTZ can leverage blockchain and other fourth industrial revolution technologies.
- Training and exchange programs where member countries can have their people train locally in their own countries to produce experts in blockchain technology.
- Exposure to Fortune 500 companies that are operating within the FTZ, making it easy to expand into other member countries.
- Support for startups and creating a bridge between big companies and local startups. The startups can leverage on the capacity of the bigger companies in the FTZ.
- A win-win situation that will enable the local startups to quickly capture its local market before other companies from overseas. Rather a synergy and collaboration with both overseas companies and local startup will help everyone win.
How Will Blockchain Enhance FTZ Implementation?
Uwakwe notes that regional markets are characterized by certain processes, and in an FTZ, these processes become even more pronounced. Shipping, logistics and transportation, processing and packaging are some of the activities that are rampant in marketplaces. He also identifies data sharing and distribution to be key for businesses to thrive these days. Based on this, and the previously mentioned factors, Uwakwe sees blockchain as an important technology in this era.
Blockchain is an open and transparent way to share record for all parties involved. According to him, this speed of record sharing and security of keeping it without being altered afterwards is a huge benefit to business processes.
Imagine where I can bring my services or goods and the next company can see every detail about the goods, including manufacturing time and condition of the goods. We can efficiently monitor each stage and know who is delaying the other parties in the business process. This is definitely a game changer for business in any Free Trade Zone.
What Benefits Are There For Nigeria
Nigeria has joined the AfCFTA project, which is all about enabling member countries to explore the benefits of FTZ among themselves. It took a while before the agreement was signed by the Nigerian government. Perhaps, some people may assume that it was a reluctant move by the country which represents the largest market in Africa. Is it about weighing up the options of what to gain or lose?
Uwawke explains that there are huge benefits for Nigeria by participating in the AfCFTA project. He sets and example with his company, SaBi as follows:
“My company, a recent early startup in blockchain called SaBi (www.sabiii.com) owns the biggest listed digital currency Exchange in Africa. Currently on our platform are over 240 listed pairs, including a Fiat section to buy with naira, a Margin section and an Exchange. These benefits were as a result of collaboration, which leads to other opportunities in the space for us.”
Uwakwe notes that many Nigerian companies are already benefiting from blockchain implementation, which aids seamless collaboration. Many blockchain startups are also in existence already in different parts of Africa, affecting a variety of industries. This is visible in areas such as education, agriculture, remittances, land registry, logistics and transport, cryptocurrency exchange, media(crypto Tv and Radio) and many more.
According to Uwakwe, there has been a surge in fintech investment on a global level, and Nigeria seems to receive the chunk of these investments. He believes that more of such will still come in areas of the fourth industrial revolution (blockchain, Artificial intelligence, augmented reality, virtual reality, big data, drone, machine learning, fintech, robotics, distributed ledger technology e.t.c)
Regulators Are Making Efforts to Catch Up
In fact the development of blockchain technology is prompting regulators to learn and study more about digital technology. These benefits, will definitely open new opportunities, and the primary goal of AfCFTA is to promote and open business between and across Africa. Perhaps, blockchain will be an appropriate tool to keep all the activities happening across these countries open for all to see.
As mentioned above, Nigeria participated in the Hainan FTZ conference in China. This it did through the National Information Technology Development Agency( NITDA), one of the agencies under the nation’s ministry of communication. This presented the Nigerian government with an opportunity to share and exchange ideas and possibly learn how digital economy FTZ works.
Uwakwe suggests that African leaders, especially the government of Nigeria should establish a free trade zone on digital economy and fourth industrial revolution. Otherwise, a free trade port digital economy and blockchain zone in the 6 geopolitical zones in Nigeria. This he says will be similar to the one in Hainan province of China.
According to him, doing so will help in harnessing startup and companies participating in tech, especially fourth industrial revolution technologies (blockchain, Artificial intelligence, augmented reality, virtual reality, big data, drone, machine learning, fintech, robotics, distributed ledger technology e.t.c).
A Lot is Already Happening in Africa
Certain organizations were acknowledged by Uwakwe to have been playing key roles in the expansion of the blockchain industry in Nigeria and Africa. Most of them are doing so through independent methods that are unique to their operations. They are:
- Cryptography Development initiative of Nigeria (CDIN)
- Blockchain industry association of Nigeria ( BIAN)
- Stakeholders in blockchain association of Nigeria (SiBAN)
- Blockchain Association of Kenya
- Blockchain Association in South Africa
- Africa blockchain Alliance(ABA)
- Cameroon Blockchain business council( cbbc)
- Blockchain Nigeria user group(BNUG)
- Africa Digital Asset Framework(ADAF)
- Rwanda blockchain association(RBA)
- Blockchain African Ladies(BAL)
- Women in Blockchain Nigeria
- Ugandan Blockchain Association
The above listed are existing and self regulatory bodies that are working to ensure that Africa is not left out with the adoption of the fourth industrial revolution technology like blockchain for a business friendly Africa
Lucky Uwakwe has been one of the vocal characters in the blockchain industry around Africa in recent years. He has played such roles as lead speaker/facilitator to many government agencies and associations like CBN, NDIC, SEC , CIBN, etc.
Iyke Aru is a seasoned author and educator in the blockchain and cryptocurrency industry. He has been in the business of crypto content writing for many years with thousands of his articles across several platforms on the internet. Iyke is based in Nigeria where he stands out as one of the most informed and credible figures in the cryptocurrency industry. Outside blockchain and crypto, you will most likely catch Iyke playing or discussing football with friends and family.