Absa Corporate and Investment Bank, a leading Pan-African financial institution, has joined Contour's digital trade finance network to enhance its letter of credit (L/C) issuance process.

Traditionally, issuing L/Cs is a manual, paper-intensive procedure that can take between five to ten days. By integrating with Contour's blockchain-based platform, Absa aims to reduce this timeframe to under 24 hours, thereby increasing efficiency and reducing costs for its clients. ​

Aligned with AfCFTA

This initiative aligns with the objectives of the African Continental Free Trade Area (AfCFTA), which seeks to boost intra-African trade by 52.3 per cent and expand the continent's economy to US$29 trillion by 2050.

Digitisation plays a crucial role in achieving these goals by streamlining trade processes and facilitating access to new markets. ​

Digital benefits

According to head of trade and working capital product at Absa, Michelle Knowles, "Absa continues to be at the forefront of digital innovation in trade as a mechanism of increasing the availability of trade finance and reducing the costs associated with these critical solutions."

"We are excited to join the Contour network, which will further strengthen our digital capabilities and support our clients with leading-edge solutions," she says.​

Efficiency gains

By adopting blockchain technology for trade finance, Absa aims to provide its clients with faster, more secure, and cost-effective solutions, thereby enhancing the overall efficiency of trade transactions across the African continent.​

In its first iteration, Contour was started in 2017 by eight major banks but announced its closure and cessation of operations on 30 November 2023, after failing to secure sufficient funding from its bank shareholders. In 2024, Contour was acquired by Singaporean startup, Xalts (DC World News, 21 February 2024).

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.