Fintech and Blockchain Solutions: Catalysts for Economic Development and Free Trade in Ghana

Africa’s economic landscape is rapidly evolving, and there is a growing recognition of the role that technology can play in driving economic growth, enhancing financial inclusion, and facilitating cross-border trade. Fintech and blockchain innovations can potentially revolutionize various sectors, including banking, payments, supply chain, and investment, thereby promoting sustainable development in Africa.

With its innovative digital financial solutions, Fintech has the power to transform the way trade is conducted. Blockchain, on the other hand, offers secure and transparent decentralized systems, enabling trusted and efficient trade processes. Together, fintech and blockchain innovations promise to remove barriers, reduce costs, and unlock economic opportunities.

To address the potential of fintech and blockchain in the trade industry, YAFO Institute and African Institute for DeFi and Blockchain (AIDBLOCK) organized a roundtable policy dialogue for free trade which focused on practical solutions and policy recommendations that can help governments and businesses leverage fintech and blockchain innovations to overcome trade barriers, reduce transaction costs, and boost economic growth in Africa. 

The event had presentations from Mr. Peter Adetor, AFCFTA SME & Trade Advisor who presented on the African Continental Free Trade Area (AFCFTA) and its Opportunities for the Tech Industry, and Mr. Nathaniel Dwamena, President of YAFO Institute and CEO for AIDBLOCK who presented on Harnessing Blockchain Technology for Sustainable & Inclusive Free Trade.

During Mr. Peter’s presentation, he highlighted the context of Intra-Africa Trade, the historical background, an overview of the AFCFTA, opportunities for various industries, and key skillsets for business. The Intra-Africa Trade accounts for 18 percent of the continent’s total trade and with this percentage, there are several barriers hindering this trade. Some of these barriers mentioned by Mr. Peter are; high levels of informality, high prevalence of non-tariff barriers, variations in currencies, language and legal regimes, security/political instability, corruption at the border, and differences in stages of integration.

Mr. Adetor’s presentation was more focused on the AFCFTA and its advantages. He mentioned that the AFCFTA is an ambitious initiative that aims to promote economic integration and boost intra-Africa trade. He added that it is an integral part of the African Union’s Agenda 2063, a strategic framework for the socio-economic transformation of the African continent. The main objective of the AFCFTA is to create one single market for free movement of goods & services.

He stressed that trading without the AFCFTA results in; limited competitiveness, lack of business collaboration and investment, limited economic integration, limited market access, decreased intra-Africa trade, and unvaried export markets but vice versa when there is trading under the AFCFTA. He further highlighted the following as key skill sets to take advantage of the AFCFTA; market research & entry, branding & marketing, pricing, networking and partnerships, negotiation, and financial literacy. He ended his presentation by highlighting some opportunities the AFCFTA provides for the tech industry which are; market expansion, e-commerce and digital trade, fintech and digital payments, supply chain technologies, digital infrastructure development, skills development and capacity building, and collaboration and partnerships.

The second speaker, Mr. Dwamena focused his presentation on blockchain and the use of smart contracts to promote inclusive free trade. He started by saying that, we are currently witnessing the era of industry 4.0 which is blurring the boundaries between physical, digital and biological spheres. Artificial intelligence (AI), machine learning, the internet of things (IoT), robotics, 3D printing, virtual reality (VR), augmented reality (AR), blockchain, and advanced data analytics are some of the notable industry 4.0 he mentioned. 

In his presentation, he stressed that blockchain is not bitcoin but bitcoin blockchain was the first blockchain and there are others like the Cardano blockchain, Ethereum blockchain, and Binance smart chain, just to mention a few. He highlighted on how the blockchain works with diagrams and created a block to illustrate to the participants how the blockchain is immutable. He further gave spotlights on the types of blockchain and their uses. The types of blockchains he talked about are; the public blockchain which can be accessed by anyone with internet, private blockchain which requires permission to access, hybrid blockchain which combines both features of a private and public blockchain, and consortium blockchain which is privately owned but not by a single entity or individual. 

Mr. Dwamena added that the public blockchain can be used for voting, fundraising, and payments, the private blockchain can be used for supply chain management, assets ownership, and internal voting, the hybrid blockchain can be used for real estate, retail, highly regulated markets like banks, and the consortium blockchain can be used for banking and payments, research, and food tracking. He went further by saying throwing light on three pillars of blockchain decentralization (there is the choice of enforcer, decentralized production, no middleman, and data integrity), security (thus, transparency, immutability, and impossible to attack all nodes), and scalability (ie. Creates wallet at a click, interoperability, and affordability).

He continued that, blockchain can be used to participate in regulatory sandboxes, establish clearly defined regulatory boundaries, introduce smart contract audits and standards, and in taxation. He concluded by saying that, the digital economy is facilitating inclusiveness and, therefore, blockchain technology is key to eliminating ‘goro boys’ (middlemen) for inclusive development. Three key takeaways from Mr. Nathaniel’s presentation are; blockchain is open, secured, and highly decentralized, smart contract facilitates real-world trade without a third party, and regulatory sandbox that promotes innovations.

The round table policy dialogue provided the forum for stakeholders’ discussion and also questions and answer sessions for all participants. One of the notable comments from Mr. Stephen Somuah, country rep for Bigspark, UK, which got the attention of the stakeholders was the issue of minting the pension scheme of Ghana onto the blockchain to avoid the struggles pensioners go through in the quest of claiming what they have worked for several years. He added that YAFO Institute should go further and engage policymakers on the issue of minting the pension scheme on the blockchain. Mr. Vicent Mensah, administrator of Ghana Institute for Procurement & Supplies, also highlighted the lack of transparency in the procurement process and its one of the leakages being exploited and breeds corruption. He admitted that blockchain can be employed to make cease some of these procurement lapses within our system in Ghana. The Chairman of the policy dialogue event, Prof Enoch Opoku Antwi, remarked that it is unfortunate to lose 8 lives in Ghana’s election 2020 in an era where blockchain voting is possible to adopt.

The event which took place on Wednesday, June  21, 2023 at AG Hotels and Suites, East Legon, had series of media interviews after the event from the media houses present.

Article by

Joshua Larweh Tetteh

Joshua is the Programs Manager at YAFO Institute. He works along with the other executives to plan, organize, and carry out activities in accordance with the organization’s goal and vision.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top