Developing regions such as Kenya are “leap frogging” local issues with mobile technology to join digitalised global trade market
The future for Europe looks “grim” but Africa is on the cusp of a trade revolution thanks to its burgeoning mobile technology, was the consensus of an esteemed panel participating in a global webcast for the Dubai Multi Commodities Centre (DMCC).
The DMCC, one of the world’s leading commodity hubs for trade and enterprise, revealed its most striking finding in its Future of Trade report, that full digitalisation of commerce could lead to a six-fold increase in the number of businesses that export goods in the next decade.
The founder of the Ethiopian Commodities Exchange Dr. Eleni Gabre-Madhin was among experts who agreed that Africa, currently number four in the world for using mobile payment transactions, could "leap frog" progress and join the ranks of the 100m to 350m businesses with the potential to engage in global export trade for the first time.
We’re really on the cusp of what should be seen as a revolution in the making if we can co-ordinate shipments and information, she said.
"The report emphasised the Uberisation of transport and logistics. If you look at the IMF recent estimates of growth, six of the ten top growing economies in the world are in Africa. 67 per cent of the remaining arable land of the land is in Africa and we’re still at one fourth of the yield potential.”
"To give an example in Ethiopia, when farmers used to get paid it would take two weeks because the payments system was so slow and so our first sell to the farmers was that if you trade through the exchange you will get paid the next morning and it’s all digital”.
Companies that want to succeed in today’s challenging marketplace must adopt this kind of robust digital strategy, think globally and embrace change, said Gautam Sashittal, Chief Executive Officer, DMCC. "If the world of global trade collaborates around these maxims, we will all surely benefit.”
Companies that want to succeed in today’s challenging marketplace must adopt robust digital strategy, think globally and embrace change
However, Europe's power is declining due to internal problems such as Brexit and its migration woes, said Non-Executive Director of Fiat Chrysler Baroness Patience Wheatcroft.
“There is no way to avoid the issue that Europe is losing ground. The future for Europe for the next few years looks pretty grim. Mervyn King has written about another crash coming sooner rather than later and that feels right to me. The China slow down is also here for a bit longer.”
HSBC Chief Economist Simon Williams shared his concern that increasingly protectionist attitudes from the West threaten economic and trade growth and emerging markets such as Africa.
“One of my concerns is that the policy response that we’re starting to see as this tepid global recovery rather loses speed is actually people stepping away from global trade, starting to talk about protectionism and defending their own market.”
To highlight the importance of their findings, DMCC and the Centre for Economics and Business Research (Cebr) created the Industry Digitalisation Index (IDI) to track the progress of change across geographies and sectors. The index will be updated regularly to provide a real-time picture of digital progress in global trade. The IDI finds that 42 per cent of all business are fully digitalised today.