Afreximbank has recently signed a facility agreement with BSMART Technology Ltd to expand the Afreximbank African Collaborative Transit Guarantee Scheme (AACTGS) in the East African Community (EAC) region. This expansion will now cover the issuance of container deposit guarantees and customs bonds in the EAC region.
Under this agreement, Afreximbank will issue container guarantees to shipping companies on behalf of BSMART Technology Ltd. Meanwhile, BSMART Technology Ltd will handle Bills of Lading and release containers to users without requiring any security deposits, providing capital relief for trade sectors.
The container guarantee facility will cover payments for all obligations to shipping companies, including damage and total loss, on behalf of container users. Typically, shipping companies would require cash deposits up to US$5,000 as collateral for each container.
During the Afreximbank Annual Meetings (AAM2024) in Nassau, The Bahamas, the agreement was signed by Mrs. Kanayo Awani, Executive Vice President, Intra-African Trade and Export Development Bank, representing Afreximbank, and Dr. Stephen Teang, Managing Director, representing BSMART Technology Ltd.
According to Mrs. Awani, this initiative will unlock approximately US$14 billion tied up in deposit requirements for containers in the East African region, benefiting trading merchants and injecting liquidity back into their operations. The facility will also support small-scale traders who lack direct financing options, enhancing trade and economic activity in the region.
Dr. Teang emphasized that the initiative will benefit landlocked countries facing high container deposit rates, potentially freeing up around US$375 million. With the goal of improving competitiveness and business opportunities, the initiative aims to facilitate the movement of materials and equipment for export manufacturing.
Hosted by the government of The Bahamas, the AAM2024 combined with the third AfriCaribbean Trade and Investment Forum (ACTIF2024) took place from June 12 to June 15, 2024.
For media inquiries, please contact Vincent Musumba, Manager of Communications and Events at press@afreximbank.com.
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