By Thandisizwe Mgudlwa
More and more support is pouring in; in an attempt to beef up the attraction of investment into Africa.
Recently the Board of Directors of the African Development Bank (AfDB) approved a USD15 million equity investment in the African Trade Insurance Agency (ATI) to increase its capital base.
A statement reports that this contribution will allow ATI to increase its provision of trade, credit and political risk insurance products that encourage foreign direct investment and trade in Africa.
Based in Nairobi, Kenya, ATI was founded in 2001, under an International Treaty by African Member States at the initiative of Common Market for Eastern and Southern Africa and with the technical and financial support of the World Bank.
ATI has a mandate to increase investment and trade in Africa through the provision of medium-long term credit and political risk insurance as well as other risk mitigation products to African countries and related public and private sector actors.
The AfDB’s equity investment in ATI will increase its capital base and allow the underwriting of more business in trade, political and credit insurance to meet strong demand as well as to enhance overall profitability.
Tim Turner, AfDB Private Sector and Microfinance Director said: “ATI uses innovative risk mitigation instruments to catalyze private sector financing into a range of critical sectors from core infrastructure to trade finance.”
In addition, by 2014, the total value of trade and investment projects in Africa supported by ATI is forecast to be as high as USD 8.6 billion. ATI further provides political risk and credit insurance targeted at infrastructure and construction projects in Africa, crucial for development in Africa.
“By 2014, 37 infrastructure projects should be supported by ATI per year with a total value of USD 4.6 billion. This level of investment and trade will generate many additional jobs on the continent”.