AfDB invests $15m in African Trade Insurance AgencyPosted on Friday, August 3rd, 2012 by Ventures Africa in News
The African Development Bank (AfDB) has made a $15 million equity investment in the African Trade Insurance Agency (ATI), a move expected to help to shore up the region’s integration initiatives as the global financial situation worsens.
The investment raises ATI’s capital base to $163 million, which the institution is able to leverage up to 10 times to cover $1.6 billion worth of transactions in each of their nine member countries. ATI is expecting a further $30 million investment from Ghana and Benin before year end which will increase its member countries to eleven.
The AfDB is now the sixth organisation to become a member of ATI. AfDB’s investment is part of a larger strategy to boost Africa’s intra-regional trade and to attract foreign direct investments.
AfDB’s Regional Director for East Africa, Gabriel Negatu said Strengthening Africa-to-Africa business is a long term solution to shielding the continent from future external shocks. Intra-regional trade of the 26 member countries in COMESA, EAC and SADC increased from $7 billion in 2000 to $32 billion in 2011.
“Africa’s demand for infrastructure is almost insatiable at US$93 billion per year. We are only scratching the surface in bridging this financing gap. With the right investment and policy mix decisions, Africa will continue being an attractive destination for capital, and we are well on our way on this front,” said Negatu.
Negatu added that there is an urgent need to provide seamless border crossing if intra-regional trade is to drive economic growth prospects for the region.
ATI’s chief executive George Otieno said Africa should focus on building strong economies that are reliant on trade and investments rather than donor aid.
Other non-country members of ATI include African Reinsurance Corporation (Africa Re), Atradius (Gerling Credit Emerging Markets SA), The Eastern and Southern African Trade and Development Bank (PTA Bank), The PTA Re Insurance Company (Zep Re) and SACE, the Italian export credit agency.
ATI offers political and credit risk insurance products, export credit guarantees and other financial products to support both international and regional trade as well as foreign direct investments in African member states.