AfCFTA launches blockchain-powered platform to ease intra-African trade

The African Continental Free Trade Area (AfCFTA) is launching a digital trade platform for African countries in partnership with the World Economic Forum, blockchain infrastructure firm IOTA and the Tony Blair Institute for Global Change. 

The platform named the Africa Digital Access and Public Infrastructure for Trade Initiative (ADAPT) will enable African merchants to trade among each other using digital identities and stablecoins over IOTA’s blockchain network. 

The details 

• Announcing the development via a blog post on its website on November 25, IOTA said the platform hopes to connect every African country to a single trade rail by 2035. 
• According to reports, the initiative is set to be rolled out next year in Kenya, Ghana and a third unnamed country before expanding to other countries, with a 2035 target set for continent-wide adoption. 
• While IOTA will provide the blockchain technology that powers the platform, the Tony Blair Institute for Global Change will provide “practical support” through its team in 17 African countries. 

How it works 

At its core, the platform is a digital public infrastructure that combines identity, data and finance services into a single trade vehicle for African states.  

• The system will utilize decentralized identifiers plugged into the databases of member countries to issue secure digital identities to traders to establish trust. 
• To settle trades, ADAPT integrates mobile money and stablecoin technology to send money across borders with speed and at reduced fees. 
• ADAPT’s builders plan to introduce built-in smart contracts and oracles that pull real-world data onchain, creating a trusted source of offchain information on the platform.
• This will reduce friction by providing reliable real-time exchange rates, logistics updates, and cargo-tracking data.

Key quotes 

• Secretary-General of the AfCFTA Wamkele Mene commented: 

“For too long, African businesses have contended with multiple systems, repetitive compliance processes, and slow cross-border logistics. ADAPT is designed to change this fundamentally. It establishes a trusted, interoperable infrastructure — an African-built backbone for digital identity, documentation, payments, and data exchange — enabling goods, services, and capital to move with the efficiency that the 21st century demands.” 

• Chido Munyati, Head of Africa at the World Economic Forum, said: 

“ADAPT marks a major milestone in our efforts to advance free trade and economic development across Africa. Trade inefficiencies remain one of the key barriers to business growth, yet the digitalization of trade processes has the power to transform how African economies connect and collaborate.” 

Why this matters 

At inception, AfCFTA was designed to boost intra-African trade by creating a single continental market that removes trade barriers, liberalizes goods and services and enables the free movement of people, capital and products.

• However, trade among African countries accounts for only 15% of all African imports and exports, suggesting that local traders would rather trade outside the continent than with counterpart countries. 
• This is not unconnected with the difficulties around intra-African payments, with most traders often needing to first convert their local currencies into the United States dollar before they are able to pay suppliers. 
• To solve the payment problem, the AfCFTA pioneered the Pan-African Payment Settlement System (PAPSS). 
• In June, Mariblock reported that PAPSS was launching a blockchain-powered currency marketplace to allow direct currency swaps between African countries without needing to first bridge to USD.