Three African states to join pan-African trade insurer
NAIROBI- Zimbabwe, Ethiopia and Ivory Coast are expected to join the Africa Trade Insurance Agency (ATI) by the end of September, officials said on Wednesday.
ATI CEO George Otieno told a media briefing in the Kenyan capital Nairobi that Zimbabwe, Ethiopia and Ivory Coast were all at advanced stages of joining ATI.
“We hope that their respective parliaments will have ratified the treaty to join ATI in the next two to three months,” Otieno said.
The three states will also be required to sign a participatory agreement with ATI whereby the country agrees to reimburse ATI for any political risk claim paid out in its country.
ATI is a pan-African trade and investment insurer that is owned by ten African governments including Kenya, Malawi, Democratic Republic of Congo, Zambia, Uganda, Rwanda, Tanzania, Burundi, Benin and Madagascar.
ATI was formed in 2001 by seven African states to offer political risk insurance, which was the biggest hindrance to capital inflows into their nations.
Otieno said that all the joining states will get a soft loan from multilateral finance institutions to acquire shareholding in ATI.
Zimbabwe will get a credit of 10 million U.S. dollars from the Eastern and Southern African Trade and Development Bank and five million dollars from the African Development Bank (AfDB) to join ATI.
Ivory Coast and Ethiopia will get 15 million dollars and 7.5 million dollars from the AfDB in order to acquire membership at the pan African trade insurer.
Otieno said the three countries were joining ATI because they have seen how other countries have benefited in terms of trade and investments.
“From 2003 to date, Kenya has been able to attract ten billion dollars of Foreign Direct Investment because of its membership in ATI,” he said.
He said ATI hoped to have 23 African states as members of his organization in the next five years.
ATI is Africa’s export credit agency. We provide political risk and trade credit risk insurance products with the objective of reducing the business risk and cost of doing business in Africa. Our main goal is to help increase investments into our African member countries and two-way trade flows between Africa and the world. We facilitate exports, foreign direct investment into and trade flows within the continent.
ATI was launched in 2001 with the financial and technical support of the World Bank and the backing of seven African countries. The African Development Bank recently joined as shareholder and partner by funding countries to join ATI.
Since 2003, we have supported over $17 billion worth of trade and investments across the continent, secured an investment grade rating of ‘A’ from Standard & Poor’s, and expanded membership with plans to attract even more African member countries and international financial institutions in the near term.
ATI is currently able to conduct business in these African countries:
Democratic Republic of Congo
To transform Africa into a prime trade and investment destination
To turn African risk into opportunity by providing insurance and financial products, in partnership with the private and public sectors
We always strive to carry out our business with a customer first approach combined with integrity, creativity, unity of purpose and an attitude of getting it right the first time
ATI was created to fill a market gap in trade and investment risk mitigation in Africa. In the late 90’s, risk mitigation tools for credit and political insurance were not available for many African countries, and where the cover existed, it was very costly. In addition, the relatively small volumes of trade and investments into these countries did not justify the establishment of national export credit agencies. The only viable solution was to form a multilateral agency that would provide more cost-effective use of underwriting capital, reduced over-head costs and the ability to encourage private sector insurers to assume risk in Africa.
In response to the demand, a number of African countries came together to establish an insurance mechanism to protect their economies against losses caused by credit and political risks. They were confident that this instrument would help local companies compete globally and help Africa attract foreign direct investment. ATI was subsequently launched in 2001 with a mandate to create insuarance and reinsurance products to help reduce the risks and costs of doing business in Africa.