Africa’s bid to stimulate private sector-led growth and increase cross-border trade has received a major boost with the signing of a memorandum of understanding between the African Trade Insurance Agency (ATI) – the continent’s only pan-African, multilateral import and export credit and political risk agency – and the Multilateral Investment Guarantee Agency (Miga), the political risk insurance arm of the World Bank. The agreement calls for the two agencies to jointly promote foreign investment within Africa.
ATI and Miga will help each other in the areas of business development, marketing and knowledge-sharing, as well as engaging in risk-sharing arrangements through coinsurance and reinsurance projects. The partnership with Miga will put ATI in a stronger position to offer political risk insurance for longer-term, equity-based foreign direct investments and to complement its products for war and terrorism physical damage and for debt-related project and trade transactions.
The partnership aims to further the development and growth of the private sector in Africa by providing the additional confidence needed by companies that see commercial opportunities in the region but where they or their financiers remain concerned about perceived political risks.
Bernie de Haldevang, chief executive and managing director of ATI, says: “This heralds a major breakthrough in the bid to increase African private sector growth as a tool for reducing poverty. It will also serve to ensure that ATI can better fulfil its mandate to encourage and support new investments into and among African countries.
“The expertise and resources of Miga, with its proven ability to draw on the World Bank Group’s extensive resources, together with ATI’s engagement of the private market to support trade political risk, where ATI member states have put up their own funds as risk capital, is a compelling and persuasive proposition. With the support of governments, the private sector and multilaterals, Africa can start to fulfil its investment potential.
“We are already working on two significant joint deals and we expect many more to follow.”