News Column

African Trade Insurance Is Truly Strategic Development Partner

May 26, 2014

John Kulekana

HYDRO-POWER dam. African Trade Insurance Agency (ATI) insured loans extended to Tanzania's power utility. TANZANIA is hosting a series of meetings of the African Trade Insurance Agency (ATI), which include the firm's 14th Annual General Meeting (AGM) and the board of directors.

According to a programme released by the organisers in Dar es Salaam last week, the board met on Monday and AGM is scheduled for Wednesday. ATI was founded in 2001 by COMESA countries through the financial and technical support of the World Bank and some African countries.

It is a multilateral financial institution providing export credit insurance, political risk insurance, investment insurance and other products to help reduce the business risks and costs of doing business in Africa.

Experts say as opposed to ordinary insurers, ATI deals with political risks and other transactions such as export credit insurance and syndicated debts.

Political risks include incidents like wars, nationalisation and government acquisition of property and investments for various reasons.

Africa has for long been regarded as a place where political risks are plenty, a factor that scares away investors.

There is no doubt that a person in his or her proper senses cannot resist to invest in Somalia, where the Al Shaabab kill people and destroy property worth billions of dollars on daily basis.

The same is the case in Nigeria, where the Boko Haram is a big threat to business and peace in general.

Tanzania Insurance Regulatory Authority (TIRA) officials said earlier last week that the meetings involve participants from 20 countries drawn from within and outside the continent.

Countries were expected to attend the meeting include Benin, Kenya, Uganda, Rwanda, Burundi, Zambia, Ghana, Cameroon, Malawi, Mozambique, Madagascar, Democratic Republic of Congo, US, Italy, Ireland and the host Tanzania.

ATI is currently able to conduct business in 10 African countries, which are Benin, Burundi, Democratic Republic of Congo (DRC), Kenya, Madagascar, Rwanda, Tanzania, Uganda and Zambia.

There are several reasons for Tanzanians to be happy in hosting ATI annual meetings this week, because it has supported a broad range of projects in virtually all the sectors of the country's economy.

The sectors include energy, agricultural, financial, and manufacturing. ATI helped the country to attract a total of US$82 million (about 132bn/-) worth of trade and investments last year.

Examples of ATI involvement include offering specialty insurance - investment and trade credit insurance - to protect against business risks such as payment default that may be caused by governments or private companies. A few years ago, ATI reportedly supported Tanesco to secure a syndicated loan of US$62 million (about 100bn/-) to finance several expansion programmes.

In its over 10 years existence, ATI has helped a lot to boost investments and trade flows into the African continent, because it is an institution that understand the continent's risks.

ATI has also served to positively influence on how the rest of the world views African risks and shattered the myth that this is a black and hopeless continent.

The UN, in fact, estimates that Africa attracted a record level of foreign direct investments in 2013 of close to $43 billion, well above the previous record of US$39 billion set in 2011.

ATI is truly, Tanzania's and Africa's reliable development partner.

For more stories on investments and markets, please see HispanicBusiness' Finance Channel

Source: AllAfrica

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