OWN CORRESPONDENT, Cairo | Monday
AN insurance agency specialising in providing political risk insurance to traders doing business in conflict-ridden Africa will be launched on August 31 this year in Uganda, the head of a regional group said on Sunday.
Secretary General Erastus Mwencha of the Common Market for Eastern and Southern Africa (COMESA) said the African Trade Insurance Agency (ATI) will provide “quick and automatic” insurance for political risk.
ATI has secured a $110m loan from the World Bank’s concessional lending arm, the International Development Association (IDA), and so far has six fully signed up members: Burundi, Kenya, Malawi, Rwanda, Uganda and Zambia.
The agency will provide insurance for trade transactions involving those countries, but is open to all African countries. Other countries, such as Tanzania, are considering ratifying the ATI agreement.
“One of the factors that continue to deter cross-border and foreign investment from flowing into African countries … is the political risk factor that African countries are perceived to present,” Mwencha told African economy ministers gathered in Cairo ahead of a COMESA summit.
ATI’s objective is to “facilitate access to, and improve the terms of trade finance for imports into and exports from African participating countries,” Mwencha said.
African businessmen complain that conflicts in some parts of the continent deter foreign trade partners from doing business with the whole region, including calm areas.
The COMESA summit will open on Tuesday to discuss enlarging its free trade area which was founded in October last year in Lusaka, with nine of the group’s 21 member countries signing up. – AFP
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