Fiscal 2017 will remain the most prolific in the annals of the African Trade Insurance Agency (ATI). The agency’s commitments reach $ 10 billion.
On the sidelines of a press conference held on 4 June, ATI pledged to provide even more support to African member states to reduce their borrowing costs and provide them with an alternative to increasing debt. currency markets or syndicated debts which currently represent 60% of African public debt.
“The continent is currently looking for African solutions to address development challenges such as affordable access to finance. As a strong African institution, ATI is on the cusp of becoming an essential option for African governments, “said George Otieno, chief executive officer of ATI.
The multilateral investment insurer posted record results in 2017 for the sixth year in a row, with a 55% increase in profits and $ 2.4 billion in gross exposures, and is well on its way to paying dividends for the year. first time to shareholders.
Driven by solid results, the company is pursuing a strategy to help governments access more affordable financing. To achieve this, ATI plans to work with more governments to provide a unique risk mitigation solution to lenders. This allows countries to negotiate more competitive rates that can reduce their cost of financing by as much as 100 basis points per year, on loans of $ 250 to $ 350 million.
In 2017, ATI took several steps to ensure its availability to offer this level of support. First, by focusing on major strategic agreements to support government development priorities. For example, in 2017, ATI provided insurance coverage on a USD159 million loan to Ethiopian Airlines to support the expansion of the airline’s fleet.
Consolidated governance
In 2017, ATI has also strengthened its governance, a further step in expanding its interventions across Africa. By reconstituting its Board, which now rotates, by riding and infusion of new talent, the agency can better adapt to the expected growth of members. This process led to the installation of a new Council and President. The new President, Yohannes Ayalew Birru, is the Executive Director of the Ethiopian Institute for Development Research (EDRI)
On the sidelines of the press conference, Dr. Birru was pleased to be appointed to this position. “ATI is an African institution underutilized by member governments at a time when ATI may be most useful. Through high-level discussions, outreach and workshops, I believe we can show governments how to better leverage their partnership with ATI to help them pursue their investment and trade goals while providing an alternative less expensive financing.
In addition to changes at the Board level, ATI is expanding its presence in key markets to include office openings in Benin, which will function as the West Africa hub of ATI, Cote d’Ivoire and Ethiopia. Importantly, ATI also plans to undertake a redesign to better reflect its new position as a strategic investment insurance partner in Africa and around the world. A & Stable’s recent restoration of ATI by S & P proves that ATI’s strategy is gaining ground traction.
In 2016, S & P placed ATI under negative watch, prompting the company to redouble its efforts to recover sovereign debt payments while putting in place structures to prevent future government delays in payments.
In 2017, ATI successfully negotiated the government’s outstanding sovereign debt repayments, which allowed S & P to restore the outlook to stable. As a sign of the growing relevance of the ITA, governments have repaid all but one of the claims As part of its last assessment in March 2018, S & P also noted that access to information for a rating improved once its capital reaches USD 250 million, as the institution is on track to reach next year.
