Ahead of the two-day roundtable on “Single Currency and Fintech to Boost Intra-African Trade and Enhance AfCFTA Implementation” scheduled to be held in Dakar, Senegal from 23-24 August, think-tank Africa Private Sector Summit (APSS) wants to take the opportunity to remind stakeholders about the importance of the African Trade Insurance (ATI) in the conversation on AfCFTA and financing.
According to the Head of Communications Unit at APSS, Mr. Emmanuel.K.Bensah, they believed that ATI is not sufficiently-engaged by Chambers of Commerce (the business community at St large), and that the Chambers of Commerce need to engage their respective governments to become members of ATI. If all 55 countries were members of ATI, this would help celebrate the Boosting Intra-African Trade (BIAT), as it would enable them access direct financing for the business community backed by ATI through insurance risk.
If access to finance is a perennial and persistent problem for AU Member States business community, it is arguable that, with ATI, this challenge is to a large extent resolved.
Already, ATI supports African governments and businesses to raise finance from international banks at acceptable interest rates because of its credit rating. This enables a reduction of their debt-burden.
Secondly, in the event of contracts requiring a sovereign guarantee, ATI is able to provide the requested guarantee in lieu of government. Third, ATI adds value to local enterprises by facilitating credit access for local enterprises.
To date, there are only 18 member States of the AU that have fully subscribed to the ATI.
In 2017, ECOWAS came closer to developing a relationship with ATI when it moved a step closer to realising the establishment of an Investment Guarantee corporation for West Africa with the inaugural meeting of a Project Implementation Committee held in May 2017. In 2016, ECOWAS waived the idea of establishing a new agency and decided to work with ATI instead. It was then agreed that up to 7 ECOWAS Member States could potentially join ATI, increasing the share capital by as much as USD100 million.
In conclusion, given the central role Chambers of Commerce play in the private sector conversation around AfCFTA, it is incumbent on them, now more so than ever, to consider engaging their governments for ATI' s membership in more strategic ways for access to finance.
Governments will continue to be an important interface for Chambers of Commerce, reason for which Chambers must engage them to ensure inclusiveness on the conversation on access to direct finance.
In addition, any type of inclusiveness needs to ensure that the Pan-African Chambers of Commerce & Industry (PACCI), which is populated by Chambers of Commerce across the continent; African Business Council(AfBC); and business associations are all part of the conversation.
AfBC remains the umbrella body to all businesses at the AU.
ATI will be represented at the panel discussion on Day 2 of the upcoming conference on Single Currency scheduled for Dakar.
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