African Export-Import Bank (Afreximbank) has urged the Nigerian government to champion the implementation of an effective regional transit guarantee scheme under the new transit regulation endorsed by the Economic Community of West African States (ECOWAS).
Delivering a keynote address at the inaugural session of the Customs Partnership for African Cooperation in Trade (Customs PACT) held in Abuja, Nigeria, Executive Vice President, Intra-African Trade and Export Development, Afreximbank, Mrs. Kanayo Awani, spoke on the challenges imposed by the current interstate road transit regime in the region, including lack of a regional transit guarantee, leading to overdependence on physical escort of goods in transit by customs which drives up costs and results in inefficiencies.
Awani promised that Afreximbank was keen on working with Nigeria, ECOWAS and the ECOWAS Bank of Investment and Development to support the region to implement an effective regional transit guarantee system, which would complement the efforts of national insurers and chambers of commerce, and empower them to increase their capacity.
According to her, the bank is currently implementing a US$1-billion transit guarantee scheme to facilitate the movement of goods across Africa by addressing persistent transit challenges and responding to the concerns of customs authorities about the risk of goods entering markets illegally, and about potential loss of customs duties and taxes.
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The banker explained that under the Afreximbank African Collaborative Transit Guarantee Scheme, a single transit bond was issued to secure customs duties, thereby reducing bureaucratic hurdles and facilitating smoother cross-border trade, with the elimination of the need for multiple transit bonds enhancing trade efficiency and substantially lowering business costs.
Awani confirmed that the scheme was already being implemented in the Common Market for Eastern and Southern Africa and the East African Community (COMESA) under a US$300-million facility with ZEP RE (PTA Reinsurance Company), a reinsurer based in Nairobi, Kenya.
Awani, who projected that if successfully implemented at a continental level the scheme would save SSA at least US$300 million annually in transit costs, assured that Afreximbank remained open to working with Nigeria and other African countries to establish one-stop-border-posts and related infrastructure, building on its experience at the Beitbridge border post between South Africa and Zimbabwe.
The banker maintained that modernisation of that border post, implemented with support of Afreximbank and other partners, resulted in clearance time at the post dropping from 3-5 days to a maximum of 3 – 5 hours.
She told delegates at the forum the bank supported the event out of the realisation that unresolved soft infrastructure issues, particularly in customs and trade facilitation, would impede free movement of goods under the African Continental Free Trade Area (AfCFTA) if not addressed.
Awani explained that data from the Africa Union Development Agency (AUDA-NEPAD) that 75% of delays in the movement of goods was due to trade facilitation issues with just 25% attributed to infrastructure gaps.
She also highlighted the challenge posed by lack of harmonised systems and their interoperability and by national customs systems that do not communicate with each other.
President Bola Tinubu sent a message of endorsement to the Customs PACT, saying that it aligned perfectly with the Nigerian government’s commitment to fostering regional integration, enhancing trade facilitation and positioning Nigeria and Africa as competitive players in the global economy.
The Customs PACT roundtable, organised by the Nigeria Customs Service, in collaboration with Afreximbank, the AfCFTA Secretariat and supported by the World Customs Organization (WCO), aims to revolutionise customs and business cooperation, promote intra-African trade and position Africa as a formidable force in global trade.
