East African Business Week (Kampala)
Bosco Hitimana
23 July 2007
Kigali — The African Reinsurance Corporation (Africa Re) plans to increase its capital from US$100million to $500million by 2015.
The strategy was approved by members of the corporation during its 29th annual ordinary general assembly held at Kigali Serena Hotel on June 30.
The meeting was attended by representatives from 24 African member countries and 3 strategic investors.
Presenting the strategy to the member countries and shareholders of the corporation, Africa Re's managing director Mr. Bakary Kamara said the capital will be increased in two installments.
The first installment equivalent to US$150million will be paid from 2007 to 2011 while $250million of the second installment will be paid from 2011 to 2015.
The corporation expects to raise its income to be generated from its different investments from 12.1% in 2007 to 32.5% in 2015.
Mr. Bakary said the increase in capital is in line with the corporation's target to tap more money from energy risks portfolio and other private and public investment projects.
The strategy will increase shareholders' funds from US$374million in 2011 to $530million by 2015. "This will enable the corporation to increase yearly growth by 23% and the corporation should be able to increase the volume of its energy business from US$21.5million to $147 million by 2015," Mr. Bakary revealed
The members approved collection of US$7.2million in 2007 and $53.5million in 2015 from covering risks in the unexplored areas of non-energy business and development projects.
According to Mr. Bakary, Africa is regaining investors' confidence. From 2002 to 2005, the continent has been able to attract close to US$65billion in Foreign Direct Investment (FDI).
"In a single year, such investments increased to US$28.9billion which is 3.2% of the world's FDI and 40 of the 53 African countries benefited from these financial inflows with a larger part devoted to extractive industries, particularly the oil prospecting and exploration sector," Mr. Bakary noted. He further said the continent, due to discovery of on and off-shore oil and gas deposits has to date estimated reserves of 104.7 billion barrels representing 8.1% of the world reserve while daily production stands at 10.3million barrels.
The shareholders requested the management of the corporation to extend its reinsurance and insurance services to the Arab countries in the Middle East as a means to widen its market.
The Africa Re was established in 1976 by member states of the former Organization of African Unity (OAU) now the African Union (AU), and the African Development Bank (ADB) as an inter-governmental institution to mobilize financial resources from insurance and reinsurance operations.
The funds are invested in Africa to accelerate economic development and foster the development of insurance and reinsurance in Africa.
It is based in Lagos, Nigeria with constituent offices in six African countries and a capital of US$100million.
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