Comesa to take up RCTG system

IN an attempt to smoothen movement of goods in Southern and East African regions, members of the Common Market for Eastern and Southern Africa (Comesa) began talks to adopt Regional Customs Transit Guarantee (RCTG) system.

The scheme will result in a single bond recognisable in the region being issued to exporters from the country of origin.
Members of Comesa are meeting in Harare to discuss the adoption of the guarantee system aimed at smoothening the movement of goods in the region.
Road transit fees, combined with national bonds, have resulted in the transportation costs rising in Africa, taking up 14 to 17% of the value of exports compared to 8,6% for developed countries.
Transportation costs are even higher in many Comesa member. The northern corridor countries in the Comesa region that include Kenya, Uganda, Rwanda and Burundi have already finalised the preparations for the scheme and would fully implement the scheme by September.
Zimbabwe, Djibouti, Ethiopia, Malawi and Sudan would come up with a date by which they would also implement it.
The scheme will result in a single bond recognisable in the region being issued to exporters from the country of origin.
Under the proposed scheme, insurance companies and banks will issue bonds that cover the rest of the Comesa region as opposed to the current regime where bonds for goods are paid in each and every country that the goods pass through.
Analysts said all means of facilitating trade were critical to the economic development of the region. The issue of trade facilitation is an important tool of economic development for developing countries, they added.
The commencement of RCTG scheme is expected to reduce costs of freight and accelerate regional economic development through the expansion of trade.
The current system of national bonds was impacting on the viability of businesses in the region as it had tied up colossal sums of money belonging to importers, clearing and forwarding agents and transporters. –– Staff Writer.