SIC Insurance Company Ltd has signed a memorandum of understanding with the Burkina Faso Chamber of Commerce for implementation of the single transit guarantee system.
In order to promote free movement of goods within the sub-region, the Economic Community of West African States (ECOWAS) adopted it among other protocols relating to the Inter-State Road Transit of Goods (ISRT) to establish a community guarantee mechanism that facilitates movement of goods in the West African sub-region.
The protocol enjoined member states to adopt a Community guarantee scheme that allows transportation of goods by road from one Customs office in a member state to a Customs office in another member state exempt of duties, taxes and restrictions while in transit. Yesterday’s event marked the start of implementing the Single Transit Guarantee Scheme on the Ghana-Burkina Faso corridor.
SIC Insurance and the Burkina Faso Chamber of Commerce are serving as national guarantors for their respective countries.
Mr. Stephen Oduro, Managing Director of SIC Insurance, said the scheme involves the transportation of imported goods by road from Ghana’s ports to Burkina Faso and will also facilitate the documentation process and reduce paperwork, as well as the collection of a single premium at the journey’s onset to cover the entire movement of goods on the corridor.
“Typically, any person importing goods for transit must deposit a security in the form of cash, insurance bond or bank guarantee to cover payment of Customs duties or other charges due on the goods in every transit country in case the goods in transit are short-landed or diverted.
“However, the current practice has been criticised as a serious drawback to trade because of its cost as a result of the premium rates, bank charges and bond fees.”
He also said the Single Transit Guarantee Scheme when implemented will improve efficiency in Customs operations and bring relief to traders and shippers by reducing the turn-around time for securing transit bonds from every country that the cargo passes through.
This is expected to also reduce the cost of transit trade and vehicle turn-around time.
“Besides curbing cargo theft, the system will also help to seal loopholes that cause member countries loss in revenue through suspected under-declaration of the export’s value or cargo theft.
“Again, implementation of the Single Transit Guarantee Scheme will help remove the opportunities presently exploited by some middlemen at our ports – who use fake tax identification numbers (TIN) to clear goods for transit and in turn divert them into the local market.
“A single guarantee system requires the issuance of a single bond to cover the entire journey from the port of departure to the destination. This will ensure that Customs officials in the transit country receive proper payment of duties for any goods moved through their territory.”
Mr. Emmanuel Yoda, Deputy Director General of the Burkina Faso Chamber of Commerce, in a remark said the move is important to show to ECOWAS that the national guarantors can establish the mechanism. He therefore called on Customs administrations, clearing agents, importers and exporters of both countries to ensure the system implementation is successful.
Mr. Seth Dwirah, Deputy Commissioner in charge of Operations at the Customs Division of the Ghana Revenue Authority (GRA), commended the move – indicating that transit trade has been a serious challenge with Customs and noted that recalcitrant traders smuggle goods, which leads to revenue leakage and under-selling for those who paid their duties.
“We hope this will seal all the loopholes and there won’t be any leakages so that government will secure the needed revenue.”
Adding her voice, Ms. Benonita Bismarck-CEO, Ghana Shippers Authority, thanked all stakeholders involved in the deal’s realisation and hoped the move will translate into growth of business in the economy.
Other stakeholders include GCNet and Borderless Alliance.