South Africa is the most developed economy on the African continent and experiences a rhythm of economic growth quite rare for most of its neighboring countries that are still finding their way towards stability. The idea of a brighter future for the South African economy is not only applicable to its market but also to a series of other boosting initiatives that can play an essential role in the country’s growth as a whole, including the establishment of new commercial activities, opening up for new technologies and becoming a hub for investors and entrepreneurs to bring their novelties into the territory. Since the apartheid, South Africa has been transforming itself in all aspects and walking towards becoming a role model to other African nations and occupying a frontline position in the worldwide economy. Keeping up to date with new tech-based opportunities and solutions is for sure part of the process to guarantee that the country’s economy keeps moving forward as it has been doing in the past years.
The manufacturing sector in South Africa is responsible for almost 70% of the country’s economy, which turned South Africa into the primary supply of general consumer goods to its neighbors inside the continent. Currently, South Africa already has a really well-developed logistics and distribution system that allows it to master this role. Furthermore, The weather conditions in the country allow it to be player number one in producing fruits and vegetables that are dependent on tropical areas to grow. Oranges are one of the essential commodities for the South African economy, along with grapes, which put South Africa in the circle of wine production, primarily due to the vast available areas for vineyards in the Northern and Western regions of the country. On top of that, SA is one of the top producers of cotton, peanuts, and corn.
Behind the great positive outcomes of keeping such a strong economy, multiple responsibilities have to be considered to ensure the growth is stable and ready to overcome unforeseen challenges that may come as the worldwide scenario keeps changing. Food safety, for instance, is a critical issue, and SA has to ensure it finds the means to monitor agricultural goods and the logistics behind them to guarantee they go well as part of the global production chain. Luckily, blockchain technology is in favor of all of that.
We have been discussing a lot about the fact that blockchain technology is here to make transactions, negotiations, and exchanges more trustworthy and less risky. Of course, from a purely economic perspective, this makes total sense. But, on top of that, if we consider blockchain outside financial transactions and put it into a broader scope, the benefits vary and are still quite positive. Going back to food safety, for example, blockchain platforms can be handy to reinforce and upgrade traceability in agricultural supply chains and can be a practical means to access storage and production data that ensures the reliability of those who produce for those who buy.
The list of potential benefits blockchain technology can bring to SA’s agricultural industry is dense. Still, there are a few key points that we have to mention before exploring the details yet to come as technological implementations progress. Regarding overall commercial finance and contracts, blockchain can also be a shortcut that adds automatization to these processes and possibilities and a more efficient way to establish communication channels between different parties in real time. Buyers and sellers can also benefit from these solutions when building a sense of trust since blockchain platforms make it possible to track payments, verify funds, and secure each delivery process is going as agreed. Furthermore, inter-organizational contracts and multi-party collaborations can also be facilitated via smart contracts secured online, making the rural supply chain more interconnected. This modern system will make it possible to keep each piece of information trackable, guaranteeing its reliability and efficiency.
The cherry on top of all of that, of course, is the possibility of making digital payments a reality in an industry that relies on multiple transactions from big stakeholders, collaborators, and consumers. Agricultural markets are indeed quite volatile, and we do not yet have a solution to overcome the oscillations and price changes influenced by national and international stock markets. However, blockchain technology is here to eliminate the slow, cash-based exchanges and reduce the costs and potential risks of transactions that are hard to track. SA’s agricultural value chain can definitely benefit from solutions that will enable it to generate, track and store data, better organize cash flows, and assess credit.
Blockchain can also provide South African financial institutions with data on the operations of farmers and other important actors of the agricultural value chain, facilitating the elaboration of convenient financial services for this new market era. These solutions can trigger groundbreaking, positive changes for those who are part of this cycle and, consequently, for international investors and clients that consume what is produced inside SA. This will likely make the agri-food sector more sustainable, transparent, efficient, and competitive, giving us positive prospects to look forward to. It is noteworthy that the advantages of blockchain solutions go beyond the agricultural industries and definitely beyond the borders of South Africa. However, because the South African economy is growing exponentially and we have been witnessing the surging popularity of crypto-based possibilities inside the African continent, wondering how these two phenomena will eventually intersect is part of the process. The value of blockchain applications and solutions can expand to many sectors of African society, and we hope the changes we can already identify are just the beginning of a new future surrounded by novel technologies and improvements.