In a launch the African Trade Insurance Agencys (ATI) Chief Executive Officer, George Otieno, officially announced the availability of ATIs financial solutions in Zimbabwe.
Flanked by Hon. Ignatious Chombo, the Minister of Finance and Economic Development, Hon. Michael Bimha, the Minister of Industry and Commerce and Dr. John Mangudya, the Governor of the Reserve Bank of Zimbabwe, Mr. Otieno announced that ATI was committed to provide solutions that could help unlock much needed investments into the country.
Zimbabwe became a member of ATI in late 2016 and has since benefited from support of more than USD300 million of insurance support for projects in vital sectors with a pipeline of projects valued at several hundred million also under consideration.
ATI supports African countries like Zimbabwe by providing investment and trade credit insurance products, for investors and project companies. These specialist classes of insurance are internationally used to make cross border investments attractive to lenders, traders and equity investors and to ultimately increase foreign direct investment.
As an A rated institution, ATIs products can also be used by the government as an alternative to sovereign guarantees, thereby managing the national debt ceiling.
Ultimately, ATIs presence offers assurance to investors and international financiers that their losses will be covered in the event of specific country risks. Additionally, for the government of Zimbabwe, the partnership with ATI enables them to solicit financing at cheaper rates on the international market.
During the official launch ceremony in Harare, Hon, Chombo remarked The Government is pleased to have joined ATI, a multilateral trade credit and political risk insurer that was established in 2001, bringing the total membership to thirteen countries. Zimbabwes membership will go a long way in mitigating the risks involved in international trade, notably sovereign risk guarantees, political risk insurance, terrorism risk insurance, reinsurance, co-insurance, and trade credit insurance. In this regard, reduction in trade risks is expected to unlock foreign direct investment, and affordable loan financing for industry capitalization in response to availability of guarantee initiatives and insurance products offered by ATI.
His counterpart, Hon. Minister Bimha, further noted I am extremely excited about this milestone achievement of Zimbabwe for becoming a full member of ATI. This will indeed go a long way in facilitating Zimbabwes trade with the rest of the world and attract the much-needed FDI to drive the countrys industrialisation agenda and infrastructure development.
ATI is unique because it is the only African-grown institution of its kind on the continent. The institutions core objective is to provide risk mitigation solutions to cover investor and trade credit risks in its member countries in order to increase investments and trade into and across Africa. ATI has become a trusted partner to international financial institutions that includes the European Investment Bank (EIB), Germanys development Bank, KfW, UK Export Finance and private insurers from the Lloyds of London insurance market who together insure a majority of the worlds investment risks. This is the network that ATI is able to bring to its African member countries that now includes Zimbabwe.
ATI also works with multilateral development financial intuitions like the African Development Bank (AfDB), African Export Import Bank (Afreximbank) and Trade and Development Bank (formerly known as PTA Bank).
It is now imperative that awareness campaigns be initiated to enlighten all intended beneficiaries on our membership to ATI, the accompanying benefits and the process of accessing them. Ultimately, I foresee a marked improvement in industry capacity utilization and production of exports, with significant increase in revenue flows and employment level. I would like to thank the African Development Bank for complementing Government efforts through contributing a total of USD2.9 million, while Government provided USD10 million to complete the Membership process added Hon. Chombo.
ATIs membership push into new countries is supported by AfDB, which to date has provided a combined USD30 million in soft loans for the membership subscription of Ethiopia and Cte dIvoire as well as an increase in the capital subscription of Benin in the past year, which reflects its catalytic role in African economies.
Zimbabwes membership is the result of many years of commitment and hard work from government partners such as the Honourable Mike Bimha, Honourable Chinamasa and Dr. Mangudya, who were the first people to see the potential of ATI to support Zimbabwe in its quest for sustainable development and economic transformation. We are honoured to now be in a position to officially welcome Zimbabwe to the ATI family, noted the CEO.