The African Export-Import Bank (Afreximbank) has announced the historic issuance of the first-ever multi-border transit bond.
The US$10 million transit bond has been issued in favour of Innovate General Insurance (IGI) of Zambia.
It is expected to enhance IGI’s capacity to issue bonds to Clearing and Forwarding Agents in Zambia and provide counter guarantees.
The bank issued the bond under the Afreximbank African Collaborative Transit Guarantee Scheme (AATGS).
The Bank created this scheme to make it easier for goods to move across different national borders without problems.
The US$1 billion Collaborative Guarantee Scheme is expected to accelerate cross-border trade in Africa.
Furthermore, it will save the continent about US$300 million annually in transit costs.
Through Afreximbank, national securities access capacity, ensuring low-cost bond issuance and facilitating trade under AfCFTA across Africa.
The AfCFTA Secretariat and Regional Economic Communities are assisting in carrying out the Collaborative Guarantee Scheme, one of the main projects under AfCFTA.
Afreximbank Empowering African Trade
The facility at IGI intends to facilitate the movement of goods across its 5,700-kilometer border with eight neighboring countries.
This is part of the larger partnership between Afreximbank and COMESA Council of Regional Customs Transit Guarantee (RCTG-Council).
While giving his remarks, Prof Benedict Oramah, President and Chairman of the Board of Afreximbank, said,
“This milestone is a realisation of the aspirations of Africa’s foreleaders about six decades ago at the inaugural meeting of the Organisation of African Unity (OAU).
Moreover, he stated, “Through this breakthrough, we have inched closer to the emergence of a single continental integrated market and dismantling the 110 borders that divided the continent into atomistic countries.”
Mr Luwa Luwabelwa, Director, Innovate General Insurance, further added that,
“The capacity provided by Afreximbank is timely and will allow the issuance of more affordable transit bonds to its clients who are Clearing and Freight Forwarding Agents and most of them are Small and Medium Enterprises.”
Talking about the partnership, Mr. Trodson Keith Chemu, President of Zambia Freight and Forwarders Association (ZAFFA) also thanked the Bank.
This is because they provided affordable transit bonds to support Customs Brokers and facilitate the movement of goods in transit.
He added that the freight forwarder industry in Zambia is working tirelessly to implement a Regional Electronic Cargo Tracking System.
To ensure the protection of the transit bonds issued, this system will also provide real-time monitoring of goods in transit.