In a move to solidifying intra-African trade, the African Export-Import Bank (Afreximbank) has signed the instrument of accession to the inter-surety agreement for the implementation of the Common Market for Eastern and Southern Africa (COMESA) regional Customs transit guarantee/bond agreement. The bank is now set to begin the implementation of its $1billion Continental Transit Guarantee Scheme, of which about $200 million is earmarked for the COMESA region.
The agreement was signed by Professor Benedict Oramah, President of Afreximbank and Dr. Elirehima Joshuo Doriye, Chairperson of the Council of Regional Customs Transit Guarantee (RCTG). It sets the stage for the implementation of the Afreximbank African Collaborative Transit Guarantee Scheme (AACTGS), a programme designed to facilitate the smooth transit of goods across Africa through a continent-wide single-technology enabled transit guarantee scheme.
Under the AACTGS, working with the African Union (AU), COMESA and other Regional Economic Communities, Afreximbank will become a regional and continent-wide guarantor, providing transit bonds covering the full range of borders that goods are required to cross. The bank will not displace existing operators but will work with them on a risk-sharing basis thereby boosting their capacity to issue bonds at a local level.
Through the scheme, Afreximbank will ensure that, when goods do not complete their transit, sums are paid in line with the duties and taxes that would have been required, thereby enhancing tax collection for African nations. In addition, the transit guarantees provided by the Bank will enable businesses to release working capital otherwise tied up as collateral against transit bonds, while also accelerating the movement of goods across borders. By speeding up transit times and reducing costs, the scheme will provide a boost to African manufacturers, ensuring they can easily access the inputs they need for their business and enabling them to pass savings on to consumers.
Oramah said: “The launch of the Afreximbank African Collaborative Transit Guarantee Scheme is a milestone in Africa’s journey towards deepening regional integration. A key tool for delivering on the vision of the African Continental Free Trade Area, the scheme will facilitate the seamless flow of goods in a connected Africa.
