AFREXIMBANK-AFRICAN

COLLABORATIVE TRANSIT GUARANTEE

SCHEME
(A-ACTGS)

AFRICAN EXPORT–IMPORT BANK

African Export-Import Bank

Banque Africaine D’Import-Export

Transforming Africa’s Trade

Document Classification: Confidential
Outline

1. Introduction
2. Supporting RECs to implement effective Transit Bonds
3. Transit Guarantee to support the AfCFTA
4. Key Transit Routes critical to Intra-African Trade
5. Key Interventions of the Bank
6. The Structure of the AACTGS
7. Expected Benefits of the AACTGS
8. Requirements for the AACTGS
9. Conclusion

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 1. Introduction
• Africa has 16 land-linked countries and this means that goods pass through transit
countries before they reach their final destination.
• Transit countries are concerned that dutiable goods purportedly in transit may end
up in their markets, so they require transit bonds.
• Transit cost add to transportation costs, especially where transit bonds are required
at every border, and this affects intra-African trade and industrialisation
($450/truck/day in delays).
• The Bank developed the Afreximbank-African Collaborative Transit Guarantee
Scheme (AACTGS) to facilitate movement of goods within RECs, under the AfCFTA
and with third countries using a single technology-enabled transit bond.
• The Bank is engaging with ECOWAS to assist them to implement an effective
regional transit guarantee scheme.
• The Bank signed transit Agreements with COMESA on 10 March 2021 where it is
acting as the Regional Surety and implementation will commence soon.
• The Bank is also working with the AU/AfCFTA Secretariat to implement the scheme
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2. Supporting RECs to implement effective
Transit Bonds

Lagos Country B Country C Abidjan

The same process apply for exports from DRC to the world via Kenya.

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3. Transit Guarantee to support the AfCFTA
South Africa Egypt

Cape Cairo
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4. Key Transit Routes critical to Intra-African Trade

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 5. Key Interventions of the Bank
The Bank’s main strategies of intervention include the following:
1. Direct Issuance of Guarantees to large clients.
2. Counterparty Guarantee to local sureties or local financial
intermediaries. This will boost the capacity of national sureties and
banks to provide guarantees at the national level and give confidence
to customs authorities.
3. Advocacy, Capacity Building and Advisory Services
4. Financing of relevant trade facilitation projects to facilitate transit
(e.g automation of transit procedures, single windows, cargo tracking,
block chain technology, interconnectivity of customs systems, One Stop
Border Posts and Border markets etc.)

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5.1 Direct and Indirect Model

Direct Model Indirect Model

* Payment of premiums or claims could be made through PAPSS

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6. The Structure of the AACTGS

Zimbabwe Zambia DRC

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7. Expected Benefits of the AACTGS
• Release of colossal sums of money tied up as a guarantee and/or
collateral in commercial banks and insurance companies.
• Reduction in costs of transit which will lead to reduction in
transport cost and cheaper products for consumers. Savings of
$300 million are expected annually when the scheme is fully
operational.
• Reduced delays at the borders and shorter transit times and
therefore reduction in turn‐around times of vehicles, which will in
turn result in reduced freight rates.
• Reduction in transit documents, simplification of transit
procedures and reduction of congestion and delays at borders.
• Providing Customs administrations with reliable security and
improved collection of duties and taxes.
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 8. Requirements for Participating in the AACTGS
(i) A regional/continental regulatory framework on transit that
establishes an effective transit guarantee scheme and regulate the
issuance of regional transit bonds.
(ii) A technology platform that will facilitate customs inter-connectivity
among regional member states.
(iii) An effective transit guarantee scheme which also allows goods to
move throughout the continent under a single technology-enabled
transit bond.
(iv) Tracking systems (if possible) and use of sealed transport.
NB: The Bank could assist with some of these requirements upon
request.

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9. Conclusion
• Reducing transit and transportation cost is critical to improving
competitiveness in the continent and facilitating intra-African trade
extra-Africa trade and participation in regional/global value chains.
• The Bank has partnered with COMESA to implement the transit
guarantee scheme and expand it to all COMESA member states
and beyond.
• The Bank is working with the AU/AfCFTA Secretariat to implement
the transit guarantee scheme in support of the AfCFTA.
• The Bank is ready to explore how to collaborate with India-Exim to
implement the transit guarantee.

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 Thank You

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Document Classification: Confidential