SIC Insurance, Burkina Faso sign single transit deal to promote trade
SIC Insurance Company (SIC) Ltd has signed a memorandum of understanding with the Burkina Faso Chamber of Commerce for the implementation of the single transit guarantee system aimed at promoting the free movement of goods within the sub-region.
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The protocol enjoined member states to adopt a community guarantee scheme that allowed the transportation of goods by road from one customs office in a member state to customs office in another member state exempt of duties, taxes and restrictions while in transit. Yesterday’s event marked the start of the implementation of 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.
The Managing Director of SIC Insurance, Mr Stephen Oduro, said the scheme, which involved the transportation of imported goods by road from Ghana’s ports to Burkina Faso, would also facilitate the documentation process and reduce
“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 stated.
Mr Oduro said the Single Transit Guarantee Scheme, when implemented, would improve efficiency in customs operations and bring relief to traders and shippers by reducing the turn-around time for securing transit bond from every country that the cargo passed 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 value of export or cargo theft.
“Again, the 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,” he noted.
The Deputy Director General of the Burkina Faso Chamber of Commerce, Mr Emmanuel Yoda, in a remark, said the move was important to show to ECOWAS that the national guarantors could establish the mechanism.
He, therefore, called on customs administration, clearing agents, importers and exporters of both countries to ensure that the implementation of the system was successful.
The Deputy Commissioner in charge of Operations at the Customs Division of the Ghana Revenue Authority (GRA), Mr Seth Dwirah, commended the move and indicated that transit trade had been a serious challenge with customs, adding that recalcitrant traders smuggled goods, leading to revenue leakage and the under-selling of those who paid their duties.
“We hope this will seal all the loopholes and there won’t be leakages so that government will secure the needed revenue,” he stated.