As per the press release, by becoming the first African bank to join Contour’s production network, Absa CIB directly tackles the issue of digitalisation in the region, as many of Africa’s trade transactions are still manual and paper-based, a process that reportedly slows down trade growth and adds complexity and costs.
Contour leverages decentralised technology to enable integration with digital systems and various digital networks. This allows for the immediate exchange of data throughout global trade routes and currently disconnected ecosystems.
As a result of its collaboration with Contour, Absa CIB’s clients will gain access to Contour’s digital Letter of Credit (LC), a solution that purportedly reduces the process of presenting documents from five to ten days to under 24 hours.
When offering their input on the newest announcement, a representative from CIB explained the reasoning behind the decision to join forces with Contour by saying that Absa seeks to increase accessibility and decrease the expenses linked to trade finance solutions. They further expressed enthusiasm about becoming a part of the Contour network, highlighting its potential to enhance their digital capacities.
Similarly, an official from Contour stressed that within the current fast-paced and interconnected global context, digital advancements hold significant importance in revealing new possibilities for the expansion of trade and the ability to reach untapped markets.
Africa has aligned itself with the wider trend towards digitalisation. As outlined in the official statement, digital developments play a significant role in tackling challenges and facilitating entry into novel markets.
Even more to this point, in Africa in particular, digitisation is critical to the success of the African Continental Free Trade Area (AfCFTA), a trade pact-related project encompassing vital sectors of Africa's economy, including digital trade and safeguards for investments, among various other domains.
As outlined in one of the latest updates regarding the implementation of the AfCFTA agreement, this accord aims to eradicate trade obstacles and enhance trade within Africa. Specifically, the project strives to promote value-added production trade across the African economy.
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