NAIROBI, Kenya, 26th January 2007
ATI, Africa’s only multilateral export credit insurance agency, which also provides political risk insurance, today announced the issuance of its first credit insurance policy to a Tanzanian company, covering it against non-payment due to insolvency or protracted default in relation to the company’s estimated annual sales of approximately US$ 20 million to a diversified mix of private buyers. The policy, which has been issued under ATI’s partnership with Atradius (the world’s second largest credit insurance group with premium income of well over US$ 1 billion), will secure the company against payment default by its corporate buyers.
Commenting on this achievement, Peter Jones, CEO of ATI announced: “The Agency was very pleased to issue the first whole turnover credit insurance policy to a Tanzanian business. Given that some 40% of the net current assets of an average trader/supplier’s balance sheet typically consist of trade receivables, the loss of even a part of this vital component of a company’s balance sheet can easily result in the business’s insolvency.”
He outlined: “? some of the benefits of taking out such a credit insurance policy include the ability to sell more to existing as well as to higher risk buyers thus taking advantage of unused capacity, slow business cycles, slow moving product and high margins. It is for these reasons that businesses in Africa have begun to realise the extent of risks they run and the huge benefits of the service that the Africa’s Export Credit Agency can provide to facilitate trade and investment in Tanzania and to other ATI’s member countries.”
Mr. Jones further stated that “?ATI’s credit insurance product offering provides a relatively cost friendly and simple financial tool to protect exporters/suppliers against financial risks associated with their potentially defaulting buyers and brings with it the added benefit of enhancing the exporters’/suppliers’ own creditworthiness, thereby opening up their opportunity for access to cheaper financing and/or better credit terms.”
Note to editors:
ATI was established at the Common Market for Eastern and Southern Africa (COMESA) Summit of Heads of States in May 2000 and launched by President Museveni of Uganda in Kampala in August 2001 in the presence of ten Heads of States and Governments. Underwriting capital, which currently stands at US$134 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.
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
Kenya Burundi
Madagascar Uganda
Malawi Zambia
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
