Expanding Africa’s investment opportunities and value chains
The President of the African Export-Import Bank, Benedict Oramah says the bank is ramping up efforts in its bid to serve as a regional and continent-wide guarantor, providing transit bonds covering the full range of borders that goods are required to cross. Speaking with CNBC Africa at the just concluded Intra-African Trade Fair in Egypt, he notes the Pan-African Payment and Settlement Systems is driving payments thereby reducing pressures on foreign currencies in Africa.
Thu, 16 Nov 2023 11:54:47 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- Afreximbank's initiative to provide transit bonds under the Continental Transit Guarantee Scheme aims to streamline the movement of goods across Africa, reducing delays and costs associated with multiple border crossings.
- Collaboration with the African Union and regional customs authorities has enabled Afreximbank to pilot the scheme in the Comesa region, issuing transit bonds and planning to expand the guarantee fund to $1 billion for continent-wide coverage.
- The integration of technology, including blockchain, and the utilization of the Pan-African Payment and Settlement Systems, which facilitate transactions in local currencies, are key factors in driving the success of the Continental Transit Guarantee Scheme and promoting intra-African trade.
The President of the African Export-Import Bank (Afreximbank), Benedict Oramah, recently shared insight at the just-concluded Intra-African Trade Fair in Egypt on the bank's efforts to enhance regional and continent-wide trade opportunities by serving as a guarantor through the Continental Transit Guarantee Scheme. This initiative aims to streamline the movement of goods across Africa by providing transit bonds that cover multiple borders that goods need to traverse. Oramah highlighted the challenges faced due to the numerous borders and the associated transit bonds required, leading to delays and increased costs for businesses. The bank has collaborated with the African Union and regional customs authorities to pilot the scheme in the Comesa region, becoming a regional guarantor under this initiative. Afreximbank has already issued transit bonds and plans to expand the guarantee fund to $1 billion once the scheme is continent-wide.
The implementation of the Continental Transit Guarantee Scheme has seen Afreximbank issue transit bonds to entities like ZEPRI, the Comesa reinsurance corporation, and BeSmart, with a focus on enabling seamless movement of goods across borders. Moreover, the bank is leveraging technology, including blockchain, to enhance tracking capabilities and customs efficiency. By working with regions like ECOAS and the Economic Committee of Central African States, the goal is to integrate the transit guarantee schemes into a unified continental system.
One of the key aspects facilitating this initiative is the Pan-African Payment and Settlement Systems, which allows for transactions and claims to be conducted in local currencies rather than foreign currency. This feature not only streamlines payment processes but also alleviates the pressure on foreign currencies, promoting intra-African trade and economic growth.
Reflecting on the challenges faced in organizing the Intra-African Trade Fair, Oramah commended the support received from Egypt in hosting the event. Despite the short timeframe and logistical hurdles, Egypt stepped in to provide the venue and logistical support needed, emphasizing their commitment to fostering stronger ties between Egypt and the rest of Africa.
In conclusion, Afreximbank's Continental Transit Guarantee Scheme represents a significant step towards boosting intra-African trade and creating a more conducive environment for businesses to operate across borders. By addressing the complexities associated with transit bonds and leveraging technology and regional partnerships, the initiative has the potential to drive economic integration and development across the continent.