Multilateral insurer seeks bigger role in Africa
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E-mail Xinhua, January 17, 2013
Kenya-based Africa Trade Insurance Agency (ATI) will add new members this year as it seeks to expand its operations to cover the whole continent from the current 10 countries where it does business.
ATI will add Zimbabwe, Sudan and Ethiopia to its membership this year, agency's CEO George Otieno told Xinhua in an interview in Nairobi on Thursday. ATI is also negotiating with the Economic Community of West African States (ECOWAS) to have its entire membership join ATI.
"ECOWAS has been planning to launch its own agency similar to ATI. So we approached them and we have been in discussions of how instead of forming another agency, all their members can join us," said Otieno. He did not however say when those discussions are expected to be completed.
The agency is tasked with providing insurance services against a range of risks that discourage investors from setting operations in Africa.
Its services are therefore seen as an incentive to attracting foreign investments and for giving confidence to foreign investors to do business-to-business deals with their African counterparts.
The expansion into more African countries is also meant to meet the growing demand of insurance services against risks associated with investing.
While Africa has high return on investments compared to other regions, investors shy away because of political uncertainty and therefore limit the much needed capital inflows into the continent.
In a bid to attract more investments, more African countries are want to replicate the ATI model that has been proved to have attracted investments that would not have happened in the countries it operates in, in absence of its services.
Foreign Direct Investment is seen as a key ingredient of development in the continent because its adds to the efforts of exploiting the abundant resources available.
ATI said the business growth it is experiencing especially on political risk and credit transfer products it is experiencing in Kenya reflects similar trends in other countries undergoing recent national elections, such as Zambia, where ATI saw a 43 percent jump in business during the year of their elections in 2011.
ATI was founded in 2001 by African States to cover the trade and investment risks of companies doing business in Africa. It only underwrites business in the member states. Currently, the agency underwrites business in 10 African countries.
When the deal with ECOWAS is completed, the agency will add new 16 members to its staple. Its services include political risk, surety bonds, trade credit insurance and political violence and terrorism and sabotage cover.
The countries that it current conducts business are Benin, Burundi, the Democratic Republic of Congo, Kenya, Madagascar, Malawi, Rwanda, Tanzania, Uganda, and Zambia. Endi
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