NAIROBI, Kenya, Jun 3 – Kenya is one of the COMESA countries that will benefit from a Regional Customs Transit Guarantee (RCTG) scheme designed to expedite the speedy movement, clearance and release of goods at border points.
Kenya Reinsurance Corporation Managing Director Eunice Mbogo said on Wednesday that the scheme set to kick off in September would reduce delays in the release of bonds and bank guarantees and forgery on bonds.
She further stated that it will reduce the cost of imports among COMESA countries.
“In the past, importers or exporters have had to buy a bond in each country. If you are sending goods to Rwanda, you buy a bond for Kenya and another one for Uganda,” Mrs Mbogo observed.
“But this will now work in such a way that you buy a bond that will serve you in all the regions.”
Speaking at the same time, COMESA Trade Facilitation Chief Programmes Officer Berhane Giday said that this will further reduce the cost of doing business.
“Moving goods in the region is very expensive since the cost of buying bonds at each and every border increases the cost,” he explained.
“When you want to get a guarantee from a bank or buy a bond from insurance companies, they do not give it to you until they get collateral,” she further said.
There are three groups involved in the RCTG overall governance: the bank institutions which include banks and insurance institutions, customs authorities and traders and the carriers.
The modalities of the implementation of the RCTG involve the establishment of a regional chain of sureties with an institutional frame work.
The RCTG will adopt the existing infrastructure of the yellow card scheme and will have a Reinsurance Pool of its own which will provide reinsurance cover to the financial institutions who would be participating in the scheme.
The clearing of house services for transaction of funds between the national sureties will also be provided.
For goods in transit across several countries within the COMESA region, only one bond will be issued and thus doing away with the current practice under which the bond is required to be issued for every country in which the goods are in transit.