New Cross-border Trade Platform To Boost Integration

Africa's trade insurance sector is poised for increased growth following the launch of a new platform offering a unified bond system for cross-border traders. The platform, dubbed the Trans-Africa Bond Alliance TABA, is part of a joint initiative by the African Export-Import Bank Afreximbank and Zep Re PTA Reinsurance company to enhance the continent's insurance capacity and enable more African businesses to participate in regional trade.

Africa has around 110 borders and 16 land-locked nations, making it necessary for traders to rely on multiple transit and customs bonds to securely move their goods across African borders. This fragmentation is blamed for avoidable delays in the transportation of goods, higher transaction costs, and reduced trade between African nations.

With TABA, traders can transport goods from Cape Town to Cairo using a single transit bond, effectively reducing delays and cutting costs linked to multiple bonds.

Speaking to African Business at the launch of TABA in Nairobi, Denys Denya, senior executive vice president of Afreximbank, said the platform leverages instruments such as transit bonds, performance bonds, and standby letters of credit to guarantee the secure movement of goods and ensure compliance with customs regulations.

Denya expressed optimism that the platform would not only lower trade costs for local businesses, but also help retain more insurance premiums in Africa. This, he said, would help boost the capacity of African underwriters.