Ethiopia joined African Trade Insurance Agency (ATI), thus enabling the agency to start insuring political risk in Ethiopia, one of the continent’s fastest-growing economies, October 19, 2016.
This was revealed yesterday in Nairobi, Kenya, where the two sides inked an agreement after a year-long process supported by African Development Bank (AfDB) funding, amounting a 7.5 million US dollars.
Speaking at the signing ceremony, Ethiopian Ambassador to Kenya Dina Mufti said Ethiopia has put in place attractive investment opportunities and incentives, including recent signed bilateral investment and double taxation avoidance agreements with major countries in order to give the appropriate guarantees that meet international standards to foreign investors.
Being a membership in ATI is an additional support and protection to the stakeholders involved in our economic growth, he added.
“With growth of 10% in the past decade and investors clamoring to enter the market, we feel we are in a good position to help Ethiopia leverage this momentum. ATI will help to de-risk transactions so that Ethiopia can attract even more investments while building up its export base,” commented George Otieno, ATI’s Chief Executive Officer.
“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,” he added.
The AfDB regional director Gabriel Negatu said Ethiopia’s affiliation with the ATI will attract prospective investors with additional guarantees to participate in the priority areas of industry, powering and lighting.
The country’s membership is potentially a game changer for the pan-African insurer with prospects that a pipeline estimated at half a billion US dollars could double the company’s business in the next few years. 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 provides political, investment and trade credit risk insurance 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 currency inconvertibility and exchange transfer, expropriation, trade embargoes, non-honouring of contracts and payment default risks among others.
To date ATI has helped its member countries attract 21.5 billion US dollars worth of trade and investments into their economies.
ATI plans to leverage Ethiopia’s initial 7.5 million US dollars subscription in order to insure over 3 billion US dollars worth of projects in Ethiopia.
As ATI starts to close deals and build on its existing pipeline in the coming months, the company also plans to host an official launch in Addis.