African transit scheme to promote seamless movement of goods across customs borders

An African Collaborative Transit Guarantee Scheme designed to promote seamless movement of goods across multiple national customs borders has been unveiled by the African Export-Import Bank (Afreximbank).

The News Agency of Nigeria (NAN) reports that the scheme – The Afreximbank African Collaborative Transit Guarantee Scheme (AACTGS) was inaugurated in Cairo, Egypt, on Sunday.

The scheme was inaugurated by Prof. Benedict Oramah, Afreximbank’s President and Chairman of the Board of Directors, at the ongoing Intra-Africa Trade Fair (IATF) 2023.

Oramah said the scheme was aimed at improving efficiency and shortening the time for border clearance.

He said the milestone was 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 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.

“We also announce the historic issuance of the first-ever multi-border transit bond in the continent and the signing of other facilities that will revolutionise the transit of goods in Africa forever.

Oramah said the bank was happy that the innovative collaboration between the Bank and Common Market for Eastern and Southern Africa( COMESA) had yielded the desired results of issuing a single transit bond.

According to him, this will make 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.

“This 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 the one billion dollar Collaborative Guarantee Scheme was expected to accelerate cross-border trade in Africa and save the continent about 300 million dollars annually in transit costs.

Oramah stated that 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).

He said the institution signed a 30 million dollar 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.”

He said the provision of financial guarantees for containers would encourage investment and make international trade more accessible and inclusive for businesses of all sizes.

Oramah said that under Afreximbank support, BSMART System Solutions would also establish 38 Integrated Customs Designated Stop Areas (ICDSA) across the East African Community (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 the 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 1.3 billion dollars to BSMART and would act as the financial advisor for the project.

Addressing the forum, Wamkele Mene, Secretary-General of the African Continental AfCFTA Secretariat, said the AfCFTA adjustment fund played a critical role in advancing Africa’s economic development.

Source: News Agency of Nigeria