By Enyichukwu Enemanna
The African Export-Import Bank (Afreximbank) has announced the launch of the Afreximbank African Collaborative Transit Guarantee Scheme (AACTGS), a project targeted at improving the competitiveness of cross-border trade in Africa.
Announcing this on third day of the third Intra-African Trade Fair (IATF2023) in Cairo, the President of Afreximbank, Benedict Oramah said this project will enable the issuance of the first-ever multi-border transit bond in the Continent, even as he said the bank has signed other facilities that will revolutionise the transit of goods in Africa forever.
Oramah said the bank has set aside the sum of $1bn to support the Scheme, which is expected to save the continent about $300m annually in transit costs.
He disclosed, “We celebrate the issuance of the first-ever multi-border transit bond in Zambia under the $10m facility to Innovate General Insurance (IGI). In addition to, announce the provision of $300m by Afreximbank to ZEP Re to boost the COMESA Regional Customs Transit Guarantee (RCTG) Pool.”
Oramah said 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.”
He added, ”The AACTGS brings us closer to transforming our continent into a single, integrated market. It is a realisation of the aspirations of our foreleaders, who, about six decades ago at the inaugural meeting of the Organisation of African Unity (OAU), saw the need for strong continental integration through trade. This flagship initiative of the AfCFTA is a testament to the power of collaboration between Afreximbank, the AfCFTA Secretariat, and Regional Economic Communities (RECs). The AfCFTA Single Transit Bond will indeed be an extraordinary achievement.”
Oramah elaborated that the Customs DGs are working on a draft continental regulatory framework and technology platform that will govern and facilitate the continental transit guarantee scheme.
Furthermore, Afreximbank has signed a $30m Container Guarantee Facility with BSMART System Solutions, which is another significant step forward in the realm of international trade and commerce.
“This will revolutionise the way to manage containers, ensuring their safe and timely transit while minimising risks and enhancing security measures. The provision of financial guarantees for containers will encourage investment and make international trade more accessible and inclusive for businesses of all sizes”, he said.
Under Afreximbank support, BSMART System Solutions will 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.
The primary objectives of these ICDSAs are to boost economic growth in the countries, enhance socio-economic conditions, and improve cargo security and transit controls. Under this mandate, Afreximbank will provide financial support of up to $1.3bn to BSMART and will act as the financial advisor for the Project.