- Japan’s Export Credit Agency, NEXI is the newest shareholder of ATI, with a $14.8 million capital injection.
- The two organisations have a long-standing strategic partnership of boosting Japanese investment and trade across Africa.
- NEXI provided reinsurance support to ATI for Sumitomo’s investment in Safaricom Ethiopia.
The African Trade Insurance Agency (ATI) has welcomed Nippon Export and Investment Insurance (NEXI) as its latest shareholder, as Japan’s export credit agency joins the Pan-African guarantee institution.
NEXI’s capital injection of $14.8 million further strengthens the enduring and expanding partnership between Africa and Japan. The deal syncs within the framework of the Tokyo International Conference on African Development (TICAD). Through this collaboration, ATI and NEXI will facilitate Japanese trade and promote Foreign Direct Investment (FDI) into Africa.
Promoting Japan-Africa trade
“Our strong collaboration with NEXI in recent years fostered within the TICAD framework has been instrumental in promoting trade and investment between Japan and Africa. We are thrilled that this strategic partnership has now culminated in NEXI’s equity investment in ATI,” explained Manuel Moses, CEO of ATI.
The move by Japan’s export credit agency comes three weeks after oil-rich Angola became ATI’s 21st member state. Authorities in Angola paid $25 million in capital subscription fees.
Seven Comesa nations joined together to form ATI in 2001, with the World Bank providing both technical and financial support. The agency’s primary responsibility is to offer insurance against business and political hazards. It is believed that doing so is essential to luring foreign direct investments across all member states.
Read also: Oil-rich Angola joins insurer ATI, pays $25 million in fees
The largest nation in Southern Africa, Angola, accounts for $467 million of ATI’s total gross exposure there at the moment. Construction, oil and gas, commerce and transportation, water supply, and wholesale and retail industries are all included in this exposure. The estimated total value of ATI’s transactions is $1.4 billion.
Japan seeking business in Africa
The CEO expressed confidence that Japan’s expanding FDIs and presence in Africa will not only enhance ATI’s capacity to facilitate trade and investment. The African Continental Free Trade Area (AfCFTA) will benefit from the move. This will be by luring more Japanese investors looking for commercial opportunities within the continent’s enormous market of over 1.2 billion people.
“We believe that Japan’s membership in ATI will contribute significantly to our institution’s ability to support economic growth and cooperation between Japan and Africa,” added Moses, underscoring the immense potential for collaboration and mutual benefit between the two regions.
Mr Atsuo Kuroda, Chairman and CEO of NEXI, expressed his deep honour in announcing NEXI’s membership in ATI.
“As a member of ATI, we are committed to maintaining a close collaboration with ATI,” stated Kuroda. He emphasised NEXI’s dedication to working alongside ATI to promote and encourage greater participation of Japanese companies in international trade and investments within Africa.
At the TICAD7 Summit held in Japan in 2019, ATI and NEXI unveiled “Japan desk” within ATI’s Nairobi office.
Access to ATI’s risk mitigation tools
This initiative aimed to facilitate African developmental and commercial projects by providing Japanese companies with convenient access to dependable risk mitigation solutions offered by ATI.
Since its inception, the “Japan desk” has been actively promoting support for both Japanese and African businesses. Currently, the program is producing $1.1 billion in significant gross exposure in important industries like technology and communication, finance and insurance, and construction.
The desk’s operations have been instrumental in facilitating trade and investment activities in Côte d’Ivoire, Egypt, Ethiopia, and Nigeria.
Read also: Japan’s financial, tech support steering Africa’s economic future
