- Angola has become Africa Trade Insurance Agency’s (ATI) 21st member state by paying $25 million in capital subscription fees.
- ATI’s gross exposure in Angola currently stands at $467 million.
- The membership was funded the Angolan National Treasury and proceeds from the landmark BITA water project.
Oil-rich Angola has become the 21st African member state joining pan-African insurer, Africa Trade Insurance Agency (ATI) after paying $25 million in subscription fees. The deal will also see Angola become first Lusophone member country in the underwriter.
ATI was established in 2001 by seven Comesa countries and with technical and financial backing of the World Bank. The agency’s core mandate is to provide insurance against political and commercial risks. This is considered necessary in order to attract foreign direct investments across member states.
Luanda’s membership was funded by the Angolan National Treasury resources and proceeds from the landmark BITA water project. BITA is a strategic public investment championing treatment, supply and storage of drinking water in Angola. At the moment, the project is targeting 2.5 million people around capital city Luanda.
Angola diversifying economy
Lauding Angola, ATI’s CEO Manuel Moses said the country’s membership demonstrates a commitment to diversify its economy. For instance, Angola will benefit by tapping ATI’s trade and investment risk mitigation solutions.
“We are happy to support Angola in its quest to economic diversification and becoming an agricultural powerhouse. Angola’s membership is timely. ATI’s risk mitigation and credit enhancement services will act as a catalyst for strengthening and diversifying Angola’s economy,” he said
Further, ATI will support Angola’s increased investment, exports and trade under Africa’s continental framework, AfCFTA.
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Under this one-of-a-kind blended finance and guarantee innovative structure, the Republic of Angola – along with the lenders covered by ATI under the transaction – agreed for the use of proceeds under the syndicated loan to also include the financing for the purpose of Angola becoming a member of ATI.
ATI provided guarantee and insurance support for the World Bank’s partially guaranteed facility to Angola for the expansion and improvement of water supply in the urban and peri-urban belts of Luanda.
ATI gross exposure in Angola
ATI’s gross exposure in Angola, the largest country in the Southern Africa region, currently stands at $467 million. This exposure is in construction, energy and gas, trade and transport, water supply and wholesale and retail sectors. Overall, ATI’s estimated transactions are valued at $1.4 billion.
“This development was made possible because of ATI’s pan African mandate that allows the organisation to cover transactions in Angola and beyond, despite ATI non-membership. Now that Angola is a fully-fledged shareholder of ATI, the country can fully access more of ATI’s guarantee solutions to attract more Foreign Direct Investments and boost its internal and external trade across the region,” Moses explained.
Angola’s economy is mainly driven by its oil sector but the country is looking to pursue new growth models for economic diversification in agriculture and private sector.
With ATI’s support, Angola is on the path to fiscal consolidation, manage their debt ceiling, increase in public and private investment, in order to resume the ascending curve of sustainable and inclusive economic growth as well as human development.
ATI growing presence across Africa
ATI has grown from a small African start-up in 2001 into a pan-African institution with presence across Africa.
Besides Angola, other member countries include Benin, Burundi, Cameroon, Côte d’Ivoire, Democratic Republic of Congo, Ethiopia, Ghana, and Kenya. Madagascar, Malawi, Niger, Nigeria, Rwanda, Senegal, South Sudan, Tanzania, Togo, Uganda, Zambia, and Zimbabwe are also members.
Institutional members include African Development Bank, African Reinsurance Corporation, Atradius Group, Chubb, CESCE (Spanish ECA), Ministry of Finance India (represented by ECGC), SACE SIMEST, The Common Market of Eastern and Southern Africa (COMESA), Trade and Development Bank (TDB), Kenya-Re, The PTA Reinsurance Company (Zep-Re), and the UK Export Finance.
