SHARM EL SHEIKH, 12 April 2010 – The Export Credit Guarantee Company of Egypt (ECGE) and the African Trade Insurance Agency (ATI) today signed a Memorandum of Understanding (MOU) that will see both institutions partner to facilitate more domestic and Foreign Direct Investment (FDI) and exports into Africa. With a combined portfolio of over $450 million, the partnership is expected to help boost intra-African trade, a primary objective of regional integration initiatives spearheaded by organisations such as COMESA.
In a show of support, the signing ceremony took place during the 3rd COMESA Investment Forum in Egypt. Participants included The Honourable Mahmoud Mohieldin, Minister of Investment for Egypt, His Excellency Sindiso Ngwenya, Director General of COMESA, Ola Gadallah, Managing Director of ECGE, and Stewart Kinloch, Acting Chief Executive of ATI.
The MOU underpins the strong growth trends in Africa that is reflected in each organisation’s bottom line. ECGE’s Africa portfolio has grown from 10 percent in 2008 to a current 25 percent while ATI has seen its business more than double each year since 2008.Investors and Exporters are increasingly turning to Africa, where expanding populations, positive growth forecasts and high returns are in stark contrast to shrinking demand and growth in Europe and the U.S.
With a $200 million portfolio, ECGE is covering Egyptian exports to the African market of infrastructure-based products such as electric cables and cement, a demand largely driven by wide-spread commitment to improving roads, energy, telecommunications and other infrastructure on the continent.
“We have seen a new trend of Egyptian Exports shifting their direction to African Markets the last two years especially in infrastructure projects. Our commitments to these projects have exceeded $ 25 million as a starting point for more projects coming in the pipelines” Stated Ola Gadallah- Chairman and Managing Director of ECGE.
To remain competitive, Africa will need to spend $93 billion a year on infrastructure, a full $48 billion more than its current spending levels according to a 2009 report issued by the Infrastructure Consortium for Africa. In 2009, ATI facilitated Africa’s infrastructure development with political risk insurance products that covered over $233 million worth of FDI into Africa and
$75 million worth of African exports, both amounts represent well over a 100% increase from ATI’s 2008 results.
“From what we’re seeing on the ground, Africa is booming. Large-scale infrastructure projects that were put on hold before the crisis are now coming back on track. In 2009, over 80 percent of our political risk cover went to support infrastructure-related projects. With improved infrastructure, I believe that in 10 years Africa will be as competitive as Asia is today,” noted Mr. Kinloch, ATI’s Acting CEO.
