Trade facilitation instruments developed by COMESA have contributed to the creation of robust regional institutions that provide re-insurance services and regional customs guarantees. These instruments are the COMESA Yellow Card, the Regional Customs Bond Guarantee (RCTG) Scheme, and the COMESA Virtual Trade Facilitation System (CVTFS).

The Yellow Card and the RCTG are credited with significantly contributing to the success of the COMESA owned PTA Reinsurance Company (ZEP-RE). The company manages and provides re-insurance to the Yellow Card and the RCTG and is now rated among the best performing institutions in the continent.

“ZEP-RE is not only underwriting reinsurance business in the entire African continent but also in parts of Asia”, COMESA Secretary General Sindiso Ngwenya told delegates attending the 28th Meeting of the Council of Bureaux of the Third Party Motor Vehicle Insurance (Yellow Card) Scheme in Dar es Salaam last week. The company is rated by Global Credit Rating (GCR) AA for local/national and BBB- for international Business.

The African Trade Insurance Agency (ATI) another COMESA institution established in 2000 to provide political risk cover from commercial sources or export credit agencies has similarly thrived. Fifteen countries in the Economic Community of West African States (ECOWAS) have enlisted as members.

The Yellow card was developed by COMESA as a trade facilitation instrument to enable trans-boundary motorist to use only one insurance cover which is valid in all countries participating in the scheme. The RCTG commonly known as the RCTG CARNET provides one regional bond for transit goods to replace multiple national bonds for each country of transit. It has reduced the total cost of freight by between 15% and 20%.

It is against this background that COMESA has developed the Virtual Trade Facilitation System, a software application that integrates all trade facilitation instruments, including the Yellow Card and the CARNET under one online platform.

“The system provides real time information on the location of goods and means of transport and integrates all customs and trade related documentation under a single sign on,” Ngwenya told the delegates. “It also allows customs authorities to pre-clear cargo and the freight forwarders and transport operators to efficiently manage the logistic supply chain thus reducing the cost of doing business and enhancing competitiveness.

He said the CVFTS will enable the industry to eliminate forgeries of Yellow Cards and minimize the fraudulent insurance claims of goods that have hither to been paid under the guise that they either have been lost in transit or destroyed in accidents.

Subsequently, the Council of Bureaux on the Yellow Card Scheme has agreed to advance US$ 1 million to the CVTFS, subject to an Agreement between COMESA and ZEP Re the managers of the Yellow Card Reinsurance Pool. The advance will be made by ZEP RE.

Tanzania, though a non-Member of COMESA, is already implementing the Yellow card scheme and has also assured of its participation in the RCTG CARNET and CVTFS as well. This will enhance the competitiveness of the logistic supply chain through the port Dar es Salaam to and from the hinterland served, namely Burundi, Eastern and Southern D.R. Congo, Malawi, Rwanda, Uganda and Zambia.