T he Common Market for Eastern and Southern Africa (Comesa) hopes to introduce the continent’s first digital free trade zone – which is expected to save importers and exporters up to US$450 million in banking fees – early this year. This follows the trade bloc’s completion last month of the design and action plan of the Digital Free Trade Area, the electronic certificate of origin (e-CO) and the draft regulations around the digital free trade zone. Comesa spokesperson Mwangi Gakunga said in a statement that the free trade zone was modelled on the one produced by the Malaysian government where all parties involved in a trade transaction were connected via blockchain technology in real time via a web of secure ledgers. “The application also supports generation of an electronic certificate of origin (E-CO). Authenticity of the e-CO can be verified using national information technology (IT) systems,” he added. Fifteen of the 19 Comesa member states – including the Democratic Republic of Congo (DRC), Swaziland, Zimbabwe and Zambia – will participate in a pilot programme of the new digi-zone this year. Gakunga did not commit to a roll-out date for the pilot programme which would enable large and small businesses to trade using mobile devices such as smartphones and tablets. “This technology application could provide greater certainty in dealing with unknown trading partners as it has applications that that can connect commercial banks, customs, ministries of finance and central banks in real time even when it comes to remittances,” Gakunga explained. He said around US$450m was paid to banks annually within the Comesa region to confirm letters of credit, highlighting that the digital free trade zone could eliminate the need for this verification, along with fees associated with the confirmation.
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