The Common Market for Eastern and Southern Africa (Comesa) has said the Regional Customs Transit Guarantee (RCTG) scheme will make the regions goods cheaper and more competitive on the global market.
Speaking on Thursday at Sunbird Mount Soche Hotel in Blantyre during the official opening of the RCTG workshop, in which the Malawi Revenue Authority (MRA), insurance companies and freight forwarders took part, Comesa RCTG chief programme officer, Berhane Giday noted that the cost of transit and transport in the Comesa region is the highest in the world.
“This makes the cost of imported goods very expensive, raises the cost of goods for consumers and producers and adversely affects competitiveness of export goods in international market.
“One way of improving our competitiveness is to reduce the transport and transit by implementing the RCTG scheme. The scheme is designed to eliminate the administrative and financial costs that are associated with the current system of nationally executed bonds,” said Giday.
Agnes Katsonga Phiri MRA commissioner of customs and excise for imports, noted that Malawi being a land locked country suffers high transportation costs and the scheme would reduce the cost of doing business in Malawi and consequently attract investment.
“The issue of trade facilitation is an important tool of economic development for developing countries, particularly, for landlocked and land-linked. A land-locked country’s trade flow to a large proportion depends upon transportation. Therefore customs security is one of the major difficulties in freight transport and trade facilitation, because guarantee payment represents a high cost for transport operators and traders.
“The current practice of raising cash or bank guarantee or insurance bond in each and every country of transit is costly, cumbersome and time consuming while nationally executed bonds have tied up a colossal sum of money. Therefore reducing transit costs, simplifying customs procedures and improving national and regional trade environments are of critical importance,” said Katsonga Phiri.
She also noted that the scheme would improve Malawi’s ranking on doing business.
The Comesa RCTG is a customs transit regime designed to facilitate the movement of goods in the region and to provide the required customs security and guarantee to the transit countries.
The scheme therefore addresses the difficulties experienced by transport operators, freight forwarders and clearing agents while effectively protecting the revenue of each State through which goods are carried.
