Building Africa’s Intra-continental Trade on ICON Blockchain
For most developing countries, blockchain technology provides enormous solutions for improving their economies. The ICON Network is one blockchain that can help governments solve some of their pending transactional and economical problems amongst others. The ICON network has a framework designed to enable independent blockchains to interact with each other. So, what does this interconnected blockchain mean for a developing nation such as Africa?
What is the ICON Blockchain
Based in South-Korea, ICON is a blockchain company that has created a network that allows independent decentralized blockchains converge at a centralized point. Currently, blockchains operate independently in different domains and areas without a unifying point. There is no design for a standard protocol that allows the transfer or exchange of data/assets from one blockchain to another. For instance, when you want to transfer assets on an insurance domain blockchain to a security domain blockchain, or moving assets from one blockchain to another, it is almost impossible to do so as there is no safe means for it.
What Icon blockchain is trying to do is to create a framework that connects one community to other communities through the ICON Republic and Citizen Nodes. What the ICON blockchain does is to allow individual communities to retain control over their policies while meeting at a central point. Each community has its blockchain linked to the ICON Republic through the Community Representative. The ICON Republic’s Blockchain is referred to as “nexus” and each of the independent blockchains is able to interact with the nexus through the Blockchain Transmission Protocol (BTP).
The Intra-Country Trading Gap
When carrying out an intra-country transaction in Africa, most of these transactions have to pass through a third party platform and recourse to a third currency, such as the euro or the dollar. Intra-Africa trade is important to the continent as the diversity of national exports will help spread wealth and goods across the continent. The fact that it is more lucrative to import/export from/to Europe does not encourage trade between traders in the continent. Also, there is no proper investment, transportation and communication framework to encourage trade in Africa. However, several bodies such as ECOWAS (Economic Commission of West African States) and the AU (African Union) have set up frameworks to help create sustainable trades in the continent. However, the blockchain can help in creating a structure for investment, cheaper and faster transactions as well as traceability of goods and data immutability among others.
Integrating ICON Network in Intra-Africa Trade
The structure that Icon blockchain has implemented in its network will make adoption easier as communities can connect with the ICON Network through a decentralized network. This will reduce the need for third parties and transactional cost as the community will share a verified ledger. However, what does this mean for Africa? As a developing nation, most of the decisions in Africa rely solely on the federal government. According to Josh Choi, the Director of Public Affairs ICONLOOP, he asserts that a greater portion of business innovation in the continent is driven by the central government.
ICON has already started a process towards building a network for African governments and businesses to interact and solve its cross border and socio-economic issues. Africa is plagued with challenges such as financial accessibility, sustainable energy and agriculture amongst others. However, despite having different countries on the continent, there is not a medium of exchange that is commonly accepted by all the countries involved.
By creating individual blockchain communities, African countries can create a central market for transactions while each of the 54 countries can make their independent policies on the ledger. By utilizing the ICON blockchain, the goals of the Africa Continental Free Trade Area (AfCFTA) will be realized. Africa still struggles with making intra-country trades and allowing the free flow of goods and investments across its 54 countries.
In an attempt to penetrate the African market, ICON has partnered with United Africa Blockchain Association (UABA) to increase blockchain awareness and growth in Africa through Dapp’s incubation and blockchain education programs. ICON signed a Memorandum of Understanding with UABA entering into a partnership of cooperation. This will eventually lead to the creation of more partnerships and an expansion of the African blockchain communities.
Through this partnership, ICON can penetrate the African market and lead to the creation of more communities in Africa. As it is, ICON has already made UABA the first civil society in Africa blockchain society to be made a Decentralized Autonomous Organisation (DAO). By spreading the awareness of the blockchain through the UABA, ICON is working towards adoption. Merchants across Africa can easily utilise ICON in their various blockchain communities in carrying out intra-country transactions. As part of its walk towards expansion into Africa, ICONLOOP had partnered with the ITU (International Telecommunication Union), the United Nations’ specialized agency for information and communication technologies. The aim of the partnership is to support the growth of businesses in Africa. ICON aims to create a framework to help sustain business development by offering opportunities to investments through blockchain technology.
Conclusion
Africa as a continent carries out more international trades than intra-trades. In 2017, 16% of the trades were within the continent while 68% were with Europe. With the ICON blockchain, Africa can see an improvement in intra-continental transactions. With the AfCFTA adopting the blockchain, even the poorest countries can benefit from the scheme of things. Getting funds from one country to another will be easier and faster and the network will also help with goods traceability and data immutability thereby ensuring trust amongst stakeholders.
