Benin, Cote d'Ivoire and Ethiopia to Benefit From African Trade Insurance (ATI) Membership Programme

23 September 2015
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African Development Bank (Abidjan)
press release

The African Development Bank (AfDB) Group has approved a combined USD 30 million soft loan to Benin, Cote d'Ivoire and Ethiopia to be utilized for membership subscriptions in the African Trade Insurance Agency (ATI), a critical step and prerequisite for ATI to commence its operations within the respective countries. Under the approvals, Benin and Ethiopia will each receive USD7.50 million, whilst Cote d'Ivoire will receive USD15.0 million.

ATI provides medium to long term credit and political risk insurance as well as other risk mitigation products to RMCs and related public and private sector actors. These products directly encourage and facilitate foreign direct investment (FDI) and both intra- and extra-African trade through Trade Finance Facilitation. ATI catalyzes private sector investment in infrastructure projects thereby promoting economic integration of participating RMCs into regional markets.

Highlighted by the AfDB Board as an innovative use of ADF resources to catalyze trade and investments in RMCs, ATI estimates that the combined facility will unlock up to US$ 1.8 billion of commercial, trade credit & political risk underwriting cover at any one time in the respective beneficiary countries. The catalytic magnitude of utilizing such limited Bank resources this way is therefore both undoubtedly and undeniably huge at up to 60 times of the investment amounts.

This facility is fully aligned with the Bank's Ten Year Strategy (2013-2022) and a number of its sectoral strategies aimed at supporting regional integration, private sector and infrastructure development for sustainable and inclusive growth in Africa. The project also aligns with Country Strategy Papers of the respective RMCs on improving the financial sector so that it can support the expansion of productive activities (especially for SMEs) and development of export capacity, through access to risk capital and credit.

According to the Director of the Financial Sector Department, Stefan NALLETAMBY, "The AfDB seeks to achieve its ambitious DFI mandate by working with and through other institutions and strategic partners, and where possible, by supporting the development of strong and viable African institutions such as ATI. This programme provides additionality through scaling up the work of ATI by supporting the beneficiary RMCs to become members".

Read the original article on African Development Bank (AfDB).

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