An African Collaborative Transit Guarantee Scheme designed to promote seamless movement of goods across multiple national customs borders has been launched in Cairo, Egypt.
This Scheme is aimed at improving efficiency and shortening the time for border clearance.
The African Export-Import Bank (Afreximbank) African Collaborative Transit Guarantee Scheme (AATGS) was launched by the bank’s President and Board Chairman of the Board of Directors, Prof Benedict Oramah, on Sunday at the on-going Intra-Africa Trade Fair (IATF) 2023.
Oramah stated that this 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).
“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 further indicated 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).
“Today, we celebrate the issuance of the first-ever multi-border transit bond in Zambia under the US$10 million facility to Innovate General Insurance (IGI). I am also pleased to announce the provision of US$300 million by Afreximbank to ZEP Re to boost the COMESA Regional Customs Transit Guarantee (RCTG) Pool.
“This substantial financial injection underscores our commitment to bolstering the capacity of the COMESA RCTG Pool, which will instil confidence in traders and businesses, thereby paving the way for increased trade volumesin the region and creating a conducive environment forinvestment, innovation, and economic growth,” Oramah stated.
He further stated that they had signed a US$30 million Container Guarantee Facility with BSMART System Solutions, which was another significant step forward in the realm of international trade and commerce.
“In a world where the movement of goods across borders is the lifeblood of our economies, efficient handling of containers is paramount. This will revolutionise the way we manage containers, ensuring their safe and timely transit while minimising risks and enhancing security measures,” Oramah said.
The provision of financial guarantees for containers will encourage investment and make international trade more accessible and inclusive for businesses of all sizes.
Under Afreximbank support, BSMART System Solutions would also establish 38 Integrated Customs Designated Stop Areas (ICDSA) across the EAC region.
These ICDSAs will offer various services, including secure truck parking, customs documentation verification, logistics hubs, container yards, vehicle inspection centres, and affordable housing estates.
He added that primary objectives of these ICDSAs were to boost economic growth in the countries, enhance socio-economic conditions, and improve cargo security and transit controls.
Under this mandate, Oramah said Afreximbank would provide financial support of up to US$ 1.3 billion to BSMART and would act as the financial advisor for the Project.
Speaking at the same event, Wamkele Mene, Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat said Mene highlighting the pivotal role of the AfCFTA adjustment fund in propelling Africa’s economic development.
The fund, as he passionately emphasized, is a transformative force, charting the course for a cohesive continent steadfastly advancing towards ambitious objectives.
Moreover, Mene unveiled a noteworthy announcement of Kenya hosting the Pan-African Payment and Settlement System (PAPPS) in Nairobi.
“This development stands as a testament to the collaborative endeavors uniting African states, African Export Import Bank – Afreximbank the African Union, AfCFTA, Africa Finance Corporation, and the African Development Bank,” he said.
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