World / East Africa
Wednesday, 19 Oct 2016 20:12 EAT
The African Trade Insurance Agency (ATI) has today welcomed Ethiopia in its fold following a year-long process that was supported with funds from the African Development Bank. The move was announced in Nairobi by African Trade Insurance Agency Chief Executive Officer George Otieno and Ethiopian Ambassador to Kenya Dina Mufti and witnessed by African Development Bank Regional Director, Gabriel Negatu.
The announcement now gives investors crucial comfort to start or continue investing in Ethiopia, one of Africa’s fastest growing economies. “I believe our entry into Ethiopia, particularly at this time, sends a powerful message to investors. Our presence signals that Ethiopia is open for business because we are standing beside them as a credible and internationally-respected insurer with an ‘A’ rating from S&P,” said Mr Otieno.
Ambassador Mufti said his Government had put in place attractive investment opportunities and incentives including recently concluded bilateral investment and double taxation avoidance agreements with major countries in order to give the appropriate guarantees that meet international standards to foreign investors.
“Ethiopia is fast becoming one of the best investment destinations in our region and our membership in ATI is an additional support and protection to the stakeholders involved in our economic growth,” noted Ambassador Mufti.
With this membership secured, ATI hopes to help Ethiopia maintain its status as one of Africa’s biggest success stories. The $66 billion economy has been expanding as much as 10.3 percent annually over recent years, according to the International Monetary Fund, with a dip to 6.5 percent last year due to drought.
The country has also been successful in attracting large manufacturers such as Unilever NV, Diageo Plc and Hennes & Mauritz (H&M) in recent years and has taken the lead in export of agricultural products.
The African Development Bank provided UDS7.5 million to Ethiopian Government as seed capital, which was paid as membership fees, with a promise to boost the country’s membership stake in ATI.
“The African Development Bank is pleased to have financed Ethiopia’s membership into ATI. The affiliation with ATI will attract prospective investors with additional guarantees to participate in the priority areas of power & lighting, feeding, industrializing and integrating Ethiopia. It will also help improve the livelihood of millions of Ethiopians,” Mr. Negatu said.
ATI has a current project pipeline estimated at half a billion USD, which is expected to double in the short-term based on existing demand for its products. Prospective projects include a-400 MW solar energy plant that would contribute to the country’s carbon neutral growth plan to improve the living conditions of its citizens.
ATI member countries include Benin, Burundi, Democratic Republic of Congo, Ethiopia, Kenya, Madagascar, Malawi, Rwanda, Tanzania, Uganda, Zambia, and Zimbabwe. Non country shareholders include African Development Bank, African Reinsurance Corporation, Atradius Group, SACE, The Common Market of Eastern and Southern Africa (COMESA), The Eastern and Southern African Trade and Development Bank (PTA Bank), and The PTA Re Insurance Company (Zep Re).
ATI provides political, investment and trade credit risk insurance and surety bonds to clients doing business in its member countries. The products are created to help countries attract more investments and to promote domestic trade by providing insurance that mitigates against sovereign risks and specifically, currency inconvertibility and exchange transfer, expropriation, trade embargoes, non-honouring of contracts and payment default risks among others.
The writer is a contributing reporter for the Kenya Free Press