Expanding Africa’s investment opportunities and value chains

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.