Afreximbank, a Pan-African multilateral financial institution, has announced the first-ever multi-border $10m transit bond, issued in favour of Innovate General Insurance (IGI) of Zambia.

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). We have, through this breakthrough, inched closer to the emergence of a single continental integrated market and dismantling the 110 borders that divided the continent into atomistic countries.”

The bond is expected to provide counter guarantees and boost IGI’s capacity to issue bonds to Clearing and Forwarding Agents in Zambia.

The Afreximbank African Collaborative Transit Guarantee Scheme (AATGS) was designed by the Bank to promote the seamless movement of goods across multiple national customs borders, as a means of improving efficiency and shortening the time for border clearances. 

The $1bn Collaborative Guarantee Scheme is expected to accelerate cross-border trade in Africa and save the continent about $300m annually in transit costs. 

Being one of the African Continental Free Trade Agreement (AfCFTA) flagship initiatives, the Collaborative Guarantee Scheme is being implemented in partnership with the AfCFTA Secretariat as well as Regional Economic Communities. 

The facility to IGI, which is expected to facilitate the transportation of goods across its almost 5,700 km of borders with its eight neighbouring countries, is a realisation of the broader partnership between Afreximbank and COMESA Council of Regional Customs Transit Guarantee (RCTG-Council).

Luwa Luwabelwa, Director, Innovate General Insurance, stated 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.”

Trodson Keith Chemu, President of Zambia Freight and Forwarders Association (ZAFFA), added that the freight forwarder industry in Zambia is working tirelessly to implement a Regional Electronic Cargo Tracking System to provide real-time monitoring of goods in transit to ensure the transit bonds issued are protected.