Nairobi, Kenya, 3rd and 4th October 2006
African Trade Insurance Agency (ATI), Africa’s only multilateral Export Credit Agency, in conjunction with Barclays Bank of Kenya and the Export Promotion Council (EPC), hosted a major trade finance clinic at the Hilton Hotel, Nairobi today. The two-day trade finance clinic targeting Kenyan exporters and importers of capital goods – mainly government parastatals – by creating awareness amongst participants as to the benefits of using an Export Credit Agency such as ATI, and other trade finance products, in promoting and enhancing cross-border trade and investment.
During the clinic, Trade & Industry Assistant Minister Hon. Petkay Miriti, in his keynote address read on behalf of Minister Hon. Mukhisa Kituyi said, “Africa’s potential to attract foreign direct investment remains. Some of the reasons for this are potential risk of reversal of government policies, foreign exchange regulations that restrict conversion, and transfer of hard currencies, confiscation and expropriation of foreign assets, war and civil disturbance occasioned. It is for this reason that Kenya became a strong member of African trade Insurance Agency. ATI’s mandate is to facilitate private sector-led trade flows, investment and productive activities through the provision of insurance, coinsurance and reinsurance, financial instruments and related services.”
Mr. Peter M. Jones, ATI’s Chief Executive Officer also had this to say “Kenyan exporters and importers can take advantage of the political and credit insurance to enhance their creditworthiness with financial institutions. These products can help them increase market share, borrow from banks with the ATI policy as security and reduce the over reliance of tangible security when receiving funding from banks. Most importantly, these products help Kenyan exporters compete effectively in the international markets for their products”
Mr. Adan Mohammed, Managing Director, Barclays Bank of Kenya said: “Barclays has been at forefront of providing personalised Trade finance solutions and we control up to 30% of market share of trade business in Kenya with trade finance flows currently exceeding Kes 19bln. Barclays recognises the role that institutions such as the African Trade Insurance Agency contribute to facilitating global trade by mitigating some of the associated risks therein. We now recognize the benefits of using of Export credit investment insurance for both political risk and commercial risk cover as an alternative method of credit enhancing transactions and mitigating risks, thereby facilitating access to finance on more competitive terms and conditions. This includes using the commercial cover policies as alternative security.”
On his part, Mr. Matanda Wabuyele the Chief Executive Officer of EPC said that “We are aware that the concept of an export credit insurance scheme and trade finance is new to a majority of Kenyans. We shall therefore continue to actively work closely with ATI at its official Kenyan Liaison Office and participate in joint ATI/EPC awareness seminars throughout the country to ensure full understanding of the benefits of ATI services and assist exporters in accessing all of the services offered by ATI.”
The trade finance clinic ended today with Finance Minister, Hon. Amos Kimunya saying “The role of ATI in enhancing the flow of capital into Africa by underwriting political and commercial risks, thereby making projects attractive to foreign investors, lenders and suppliers, is crucial. The negative perception of the high risk of doing business in Africa has often limited our competitiveness in global trade. ATI was therefore established by African States as a credible, viable insurance mechanism to mitigate this perception and create a level playing field for Africa in attracting foreign direct investment and in supporting inter-regional and international trade and investment.”
Note to editors:
ATI was established at the Common Market for Eastern and Southern Africa (COMESA) Summit of Heads of State in May 2000 and launched by President Museveni of Uganda in Kampala in August 2001 in the presence of ten Heads of State and Government. Underwriting capital, which currently stands at US$123.4 million, has been made available to ATI’s member countries by the International Development Association (IDA), the concessional lending arm of the World Bank.
World Bank funds, lent to member states for the sole purpose of being used to support ATI’s underwriting, and for which loans the member states are liable to IDA, are leveraged through the provision of additional insurance capacity from both public and private commercial and political risk insurers. The effect of these partnerships can be to significantly increase the available capacity for transactions that ATI supports. ATI became operational in April 2002 when the initial tranches of the IDA funds were disbursed and ATI issued its first insurance policy.
Since then ATI has issued insurance policies covering political and commercial risks in 6 countries for a total transaction value of USD 211 million. The sectors covered include telecommunications, manufacturing, agribusiness, services, mining and real estate.
Beneficiaries include foreign companies exporting goods and/or services to participating African countries, foreign financiers funding exports and African companies from ATI countries that are exporting goods/services to the rest of the world.
Member Countries:
Burundi Rwanda
Democratic Republic of Congo Tanzania
Djibouti * Uganda
Eritrea * Zambia
Kenya Madagascar
Malawi
* Full membership is subject to ratification
Products and Services:
Political Risk Insurance for Cross Border Project and Trade Transactions
Non-payment Cover for Private, Parastatal and Sovereign Obligors
Whole turnover Credit Insurance (protection against Non-payment of Private Buyers)
Currency Inconvertibility and Non-Transfer Cover
Confiscation Expropriation Nationalisation & Deprivation Cover (Tangible Assets)
Foreign Direct Investment Insurance against Confiscation Expropriation Nationalisation & Forced Abandonment; and
War and Civil Disturbance Cover
