The East African Community (EAC) is set to launch a regional bond to enhance trade facilitation in the region and provide a cheaper and more efficient solution for the business community.
This was revealed during a meeting between the EAC Secretariat and stakeholders to discuss the procedures and benefits of the regional bond in comparison to the COMESA Regional Customs Transit Guarantee (RCTG) and to get feedback from the stakeholders.
Kagriel Kino, a representative from the Secretariat said the regional bond will serve as a substitute for the member nations and not a replacement for the COMESA RCTG bond which is currently being used.
“We became aware of the shortcomings of the COMESA RCTG bond and have developed a cheaper and more efficient solution for the business community in order to guarantee that bond issuers in each of the EAC partner states have access to a larger pool of liquidity in a single market,” he noted.
The EAC regional bond intends to reduce the costs of bonds, guarantees, and collaterals charged by sureties, as well as the costs of bonds and guarantees charged by insurance and customs clearing agents.
This is in addition to the reduction of delays at border posts, the simplification of the clearing process, the provision of business opportunities to all citizens of member states, and the minimization of revenue leakages. The system will also be interfaced with the National Customs System to provide a timely update on transit entry declarations.
In his remarks, Abel Kagumire, Commissioner of Customs, welcomed the initiative, noting that it will improve trade facilitation in the region.
“We believe that it is going to improve our trade facilitation because we have different bonds in different countries, so it is important that we have one bond that runs through the region, and Uganda will be ready to support this,” he said.
The Deputy Secretary General for Customs, Trade, and Monetary Affairs at the East African Community, Annette Mutaawe Ssemuwemba, noted that the initiative aims to bring the public and private sectors together and that it signals the secretariat’s commitment to regional integration and economic prosperity in the EAC.
“We commence the rollout of a home-grown solution that has been designed to address the needs of our region and commend URA for accepting to pilot: Uganda is always a forerunner ready to provide the technical support and resources for such initiatives,” she said.
The idea of the EAC Customs Bond was envisaged in 2014 and is hinged on the Single Customs Territory, which facilitates the movement of goods.
The 4-day engagement was attended by stakeholders including the Uganda Revenue Authority, insurance companies, clearing agents, and the Insurance Regulatory Authority (IRA).