The Government of Ghana has announced that it will be hosting the 22nd Annual General Meeting (AGM) of the African Trade Insurance Agency (ATI) in Accra on Thursday, June 23, 2022, at the Kempinski Gold Coast Hotel.
Ghana became the 15th Member State of African Trade Insurance Agency (ATI) in October 2019. Subsequently, ATI officially launched its services and products in the Ghanaian market in February 2020, sensitized the importance of the country’s membership of ATI and created awareness with the private sector and relevant Government agencies.
A statement released by Ghana’s Ministry of Finance stated that since the introduction of its product and services in the Ghanaian market, the African Trade Insurance Agency (ATI) has provided political risks coverage for transactions and projects in the financial, health, and roads sectors with a total gross exposure of US$ 450 million.
Aside providing political risk coverage, the Ministry of Finance disclosed that the Agency is also playing a significant role in the Ghanaian economy by supporting efforts by the Central Bank to address balance of payment challenges as well as strengthen the local currency.
“Through ATI’s support, the capacity and quality of our health sector has been greatly enhanced. ATI’s intervention in the financial sector is also helping Bank of Ghana to maintain adequate foreign exchange to meet external transactions, ease its balance of payments challenges, and support the local currency”.Ministry of Finance, Ghana
ATI is a multilateral financial institution created in 2001 as a credit and political risk provider predominantly providing Political Risk (also known as Investment Risks), Trade Credit insurance for cross border trade and surety bonds insurance.
It was established with the financial and technical support of the World Bank and currently has 21 member countries and 10 other corporate shareholders including the African Development Bank.
Since its inception, ATI has become a much sought-after partner for the government, banks, traders, SMEs, to mention but a few, and continues to bridge the gap between sovereigns & international investors; creditors & suppliers. ATI is the second highest rated institution in Africa and is rated A/Stable by Standard & Poor’s and Moody’s.
Ghana’s benefits with the ATI
Meanwhile, the ATI highlighted in a statement that in 2021, it insured a portfolio of trade and investments across Africa valued, at US$6.6 billion, and since its inception, ATI has supported US$71 billion worth of investments and trade into Africa.
ATI is able to support such volumes of transactions in part because of an impressive network of international financial institutions such as reinsurance companies and financiers.
“This clout is essentially what will benefit Ghana on several fronts. First, thanks to its membership in ATI, the government can, as other West African member countries of ATI, use ATI’s insurance to attract commercial financing at the levels of more developed economies. This means financing at better terms and longer duration, and can subsequently help pay off more expensive debts and create a more sustainable debt management process”.ATI
More broadly, other sectors of the economy also stand to benefit. In the financial services sector, Banks in particular stand to gain, as ATI’s presence will help to increase banks’ access to credit insurance.
This insurance supplements the collateral that banks heavily rely on in lending to Small and Medium-sized Enterprises (SMEs). These SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development.
“Thanks to ATI, banks in Ghana have therefore potentially gained additional and improved new revenue streams, consequently helping the Ghanaian economy to grow. The manufacturing and trade sectors also benefit from ATI’s credit insurance by expanding their sales beyond Ghana, enabling a targeted approach for exporters and suppliers and to import needed goods that can help build their companies”.ATI
According to the ATI, the Energy Sector will also be on the winning end of this partnership with ATI. Through ATI’s Regional Liquidity Support Facility (RLSF), backed by KfW Development Bank and NORAD, Ghana can help mitigate the negative impacts of climate change.
The Facility was created to help tackle climate change by supporting renewable energy projects in ATI’s member countries. RLSF supports small and mid-scale renewable energy projects by protecting the developers against the risk of delayed payments by public off-takers.
This ensures that more renewable energy projects reach financial close, enabling the government of Ghana to create a greener energy mix to help mitigate climate change. The Facility can be accessed once Ghana signs onto the RLSF Memorandum of Understanding, a process expected to be finalized over the next year, the ATI disclosed in a statement.