By Vivian Ihechu
The African Export-Import Bank has introduced an African Collaborative Transit Guarantee Scheme designed to promote seamless movement of goods across multiple national customs borders.
The scheme is aimed at improving efficiency and shortening the time for border clearance.
The scheme, African Export-Import Bank (Afreximbank) African Collaborative Transit Guarantee Scheme (AATGS), was launched in Cairo, Egypt, on Sunday by the bank’s President and Board Chairman of the Board of Directors, Prof. Benedict Oramah, at the on-going Intra-Africa Trade Fair (IATF) 2023.
According to Oramah, the milestone is a realisation of the aspirations of Africa’s foreleaders about six decades ago, at the inaugural meeting of the Organisation of African Unity (OAU).
“Today, we stand on the brink of a new era for Africa, an era marked by collaboration, innovation, and progress.
“We gather to launch the Afreximbank African Collaborative Transit Guarantee Scheme (AACTGS), which signifies a monumental achievement in our journey towards continental integration and economic prosperity.
“This groundbreaking project is a bold step towards improving the competitiveness of cross-border trade as we announce the historic issuance of the first-ever multi-border transit bond in the Continent and the signing of other facilities that will revolutionise transit of goods in Africa forever.
“We are happy that this innovative collaboration between the Bank and COMESA has yielded the desired results of issuing a single transit bond that makes it possible for the movement of goods across the continent without hindrance.
“As you may be aware, Afreximbank in 2021 joined the COMESA Regional Customs Transit Guarantee (RCTG) Scheme as a Regional Surety, which allowed the Bank to issue single transit bonds that are acceptable across all countries in COMESA and also guarantee bonds issued by other sureties within the region.
“We have, through this breakthrough, inched closer to the emergence of a single continental integrated market and dismantling the 110 borders that divided the continent into atomistic countries,” Oramah said.
He said that the US$1 billion Collaborative Guarantee Scheme was expected to accelerate cross-border trade in Africa and save the continent about US$300 million annually in transit costs.
Oramah stated that as a Pan-African Multilateral Financial Institution, Afreximbank was able to provide capacity to national sureties to enable them to issue bonds at affordable rates and facilitate intra-African trade under the African Continental Free Trade Agreement (AfCFTA).
Oramah said the institution signed a US$30 million Container Guarantee Facility with BSMART System Solutions, which was another significant step toward seamless international trade and commerce.
“In a world where the movement of goods across borders is the lifeblood of our economies, efficient handling of containers is paramount.
“This will revolutionise the way we manage containers, ensuring their safe and timely transit while minimising risks and enhancing security measures,” Oramah said.
The provision of financial guarantees for containers will encourage investment and make international trade more accessible and inclusive for businesses of all sizes.
Under Afreximbank support, BSMART System Solutions would also establish 38 Integrated Customs Designated Stop Areas (ICDSA) across the EAC region.
These ICDSAs will offer various services, including secure truck parking, customs documentation verification, logistics hubs, container yards, vehicle inspection centres, and affordable housing estates.
He added that primary objectives of these ICDSAs were to boost economic growth in the countries, enhance socio-economic conditions, and improve cargo security and transit controls.
Under this mandate, Oramah said Afreximbank would provide financial support of up to US$ 1.3 billion to BSMART and would act as the financial advisor for the Project.
Addressing the forum, HE Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, said the AfCFTA adjustment fund played a critical role in advancing Africa’s economic development.
