ATI proposal supports Tanzania’s efforts to attract more investments and decrease commercial borrowing costs - African Trade Insurance Agency

ATI proposal supports Tanzania’s efforts to attract more investments and decrease commercial borrowing costs

  • The African Trade Insurance Agency (ATI) held a series of briefings with the Government of Tanzania to provide options to obtain more affordable and longer-term financing.
  • In the last five years, ATI has helped the government attract investments valued at over US$1 billion. ATI is confident it can help the government attract much more investments.
  • ATI’s support has included the Standard Gauge Railway Project among other vital infrastructure initiatives.

DODOMA, 5 February, 2020 – Like many African countries, Tanzania is seeking to develop its infrastructure as a critical step to boost tourism and investments. In a series of briefings with the government, the African Trade Insurance Agency (ATI) offered solutions that could provide the government a viable option to attract needed investments while reducing future financing charges by US$2-3 million (TZS 4.5 – 6.8 billion) annually on financing of 10 or more years.

Tanzania is a founding member of ATI, a multilateral and pan-African institution providing investment and credit guarantees to help member governments attract investments. Under the proposed scheme, before the government approaches the international market with a borrowing request, ATI could provide a ‘credit wrap’ on the request, which would trigger a reduction in the financing charges.

ATI has already helped several West African member governments under the proposed initiative. In 2019, ATI helped Benin and Côte d’Ivoire to obtain close to US$1 billion financing with tenures in the low-single digits and with 10 to 12 year tenures. These terms have historically been off limits for most African governments as a result of the region’s high risk profile, which has led to a shortage of credit insurance. ATI bridges this gap by providing these required guarantees to its member governments along with the credibility of its S&P and Moody’s investment grade ratings.

In the last five years in Tanzania, ATI has supported overall investments, which includes the Standard Gauge Railway, valued at over US$1 billion (TZS2 trillion) largely in the financial services, energy and infrastructure sectors. And with a current Gross Exposure in Tanzania of US$447 million (TZS1 trillion), ATI is confident that it can help the government of Tanzania attract even more investments.

QUOTE from Tusekile Kibonde, Resident Underwriter Tanzania, ATI

“ATI is now among the top DFIs working in Africa. We achieved this status based solely on the valuable partnerships we have formed over the years with our member governments. As a founding member, Tanzania was an early supporter of our development so we are humbled to now be in a position to put everything we can into helping to propel our countries forward.”

QUOTE from Godfrey Simbeye, Director of ATI and Executive Director of the Tanzania Private Sector Foundation

“As the representative to Tanzania on ATI’s Board of Directors, I can confirm that ATI has grown into a powerful partner that is respected by African Governments as well as international financial institutions. ATI is therefore well positioned to provide a link to international markets that place African governments at an advantage.”

QUOTE from Prosper Gunze Nambaya, Ag. Director of Corporate Banking, CRDB Bank PLC

“CRDB Bank Plc, in partnership with ATI, has been able to support big infrastructure projects in Tanzania, which as a commercial bank, we could not be able to do alone. We look forward to enhancing this partnership with ATI, to support more infrastructure projects in Tanzania, which are in line with the MDGs and the 5th phase of the Government’s initiatives of investing in infrastructure projects and the industrialization agenda.”

QUOTE from Linda Teggisa, Head of Trade Finance, NMB

“As a leading fully-fledged local commercial bank in Tanzania, NMB Bank PLC is committed to support the Government’s development plans in a sustainable manner through innovative financial solutions, leveraging key partners with strong global recognition and capacity such as ATI towards achieving the goals of Vision 2025.”

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