HARARE: Zimbabwe seeks to unlock investment and trade flow amounting to $900 million, once President Robert Mugabe signs the instrument of ratification for the country to join the African Trade Insurance (ATI).
ATI is Africa’s export credit agency and provides political risk and trade credit risk insurance products, with the objective of reducing the business risk and cost of doing business on the continent.
Zimbabwe applied for membership in ATI in 2010. In October, the ATI Membership Agreement was ratified by Parliament. To complete membership, Zimbabwe requires a minimum capital subscription of $15m. The African Development Bank will give the country a grant of $5m and Zimbabwe will have to mobilise the balance from banks and the private sector.
Finance minister Patrick Chinamasa said Zimbabwe stood to benefit significantly from ATI membership as it offers unique products, among them, sovereign risk guarantee, political risk insurance, terrorism risk insurance, reinsurance and co-insurance, given the negative perceptions about the country as a high risk investment and business destination.
In his 2016 National Budget, Finance minister Patrick Chinamasa said a number of policies to mobilise Diaspora remittances as an important source of liquidity in the economy have been instituted. “The proposed membership is expected to immediately unlock total investment and trade flows amounting to at least $900m,” Chinamasa said.
ATI is able to conduct business in 10 African countries — Benin, Burundi, Democratic Republic of Congo, Kenya, Madagascar, Malawi, Rwanda, Tanzania, Uganda and Zambia.
Its main goal is to help increase investments into our African member countries and two-way trade flows between Africa and the world. The organisation was launched in 2001, with the financial and technical support of the World Bank and the backing of seven African countries.
Since 2003, it has supported over $13 billion worth of trade and investments across the continent, secured an investment grade rating of ‘A’ from Standard & Poor’s and expanded membership with plans to attract even more African member countries and international financial institutions in the near term”.
