The East African Community, on Monday, August 4, launched EACBond, a single bond for transporting goods across partner nations.
The EACBond is set to transform how EAC nations trade with each other, as importers will only need to pay one customs bond across the region instead of different ones in each country.
A customs bond is essentially a financial guarantee, backed by money or insurance, that goods in transit will comply with customs regulations as they move through countries.
"The EAC is today launching the EACBond, a regional customs guarantee instrument that replaces the need for multiple national bonds when transporting goods across Partner States," EAC stated in a notice.
"By allowing traders to secure their entire cargo journey with a single bond, the EACBond will significantly reduce trade costs, ease border delays and free up business capital."
However, the single bond will not serve all eight EAC members from the outset, although Kenya is among the three East African nations where the pilot programme will launch.
The other two countries in the pilot programme are Rwanda and Uganda, although the community notes, "The full rollout will progressively include all Partner States, coordinated through customs authorities.
"Compliance will be enforced through automated systems linked with customs and cargo tracking, ensuring that all movements are monitored and risk managed," it added.
The timeline for when the other five countries—Tanzania, Burundi, South Sudan, Democratic Republic of Congo (DRC), and Somalia— will be included in the single bond system has yet to be announced.
Speaking at the launch in Kampala, Uganda, the EAC Secretary General, Veronica Nduva, highlighted how the high bonds across each country constrained business operations across the region despite its multibillion-dollar potential.
"Each year, over $35 billion (Ksh4.5 trillion in current exchange rates) worth of goods move through our regional corridors," she stated.
"Yet, much of this trade has been constrained by high financial guarantees and complex border procedures. The EACBond simplifies compliance, reduces operational costs and unlocks your working capital."
