The East African Community (EAC) is preparing to introduce a regional bond that aims to streamline trade processes in the region while offering a more cost-effective and efficient solution for businesses. This was a central topic of discussion during a recent meeting held between the EAC Secretariat and various stakeholders. The meeting sought to explore the procedures and advantages of the regional bond in comparison to the COMESA Regional Customs Transit Guarantee (RCTG) and to gather feedback from the involved parties.
Kagriel Kino, a representative from the Secretariat, clarified that the regional bond would serve as an alternative to the existing COMESA RCTG bond used by member nations, rather than replacing it. He explained, “We identified the limitations of the COMESA RCTG bond and have developed a more cost-effective and efficient solution to benefit the business community. This will ensure that bond issuers from each EAC partner state have access to a larger pool of liquidity within a single market.”
The EAC regional bond aims to reduce costs related to bonds, guarantees, and collateral typically charged by surety providers, as well as the fees associated with bonds and guarantees imposed by insurance and customs clearing agents. Additionally, it seeks to minimize delays at border crossings, simplify clearance procedures, create business opportunities for citizens of member states, and reduce revenue losses. The system will also be integrated with the National Customs System to provide real-time updates on transit entry declarations.
Abel Kagumire, Commissioner of Customs, expressed support for the initiative, emphasizing its potential to enhance trade facilitation in the region. He stated, “We believe that it will improve trade facilitation because we currently have different bonds in different countries. It is essential to have a single bond that covers the entire region, and Uganda is ready to support this endeavor.”
Annette Mutaawe Ssemuwemba, the Deputy Secretary General for Customs, Trade, and Monetary Affairs at the East African Community, highlighted that the initiative aims to bring together both the public and private sectors. It underscores the secretariat’s commitment to regional integration and economic prosperity within the EAC. She said, “We are launching a locally designed solution that caters to the needs of our region. We commend URA for agreeing to pilot this initiative; Uganda consistently leads the way in providing technical support and resources for such projects.”
The concept of the EAC Customs Bond was initially envisioned in 2014 and is closely linked to the Single Customs Territory, which streamlines the movement of goods. The four-day engagement involved various stakeholders, including the Uganda Revenue Authority, insurance companies, clearing agents, and the Insurance Regulatory Authority (IRA).
