NAIROBI, 20 December 2019 – The African Trade Insurance Agency (ATI) continued its record eight-year-long growth run with projected 2019 results expected to significantly outperform previous records.
ATI’s top-line results are projected to outpace, by a significant margin, previous records.
The results are in part a by-product of an innovation that began in 2017, when ATI sought to find a solution to the financing challenges faced by some of its member governments. Historically, expensive commercial financing with shorter tenures placed countries in a tough situation of mismatches between the long-term financing needed to fund priority infrastructure projects and higher debt servicing fees that potentially increased countries’ debt burdens.
In response, ATI partnered with a number of leading international commercial banks to put in place a ‘credit wrap’ structure that secured these loans against the risk of sovereign non-payment. ATI’s investment-grade cover along with reinsurance capacity from its global partners was enough to help countries obtain cheaper financing (sub-five per cent) with longer tenures (10 – 12 years). This ATI-wrapped financing has helped countries to re-profile some of their existing (frequently shorter-term and more expensive) financing, helping to cut debt-servicing costs and to create more manageable redemption curves.
This solution has been applauded globally for facilitating a new class of institutional investors (such as pension funds and life insurance companies from Asia and Europe), which would not have happened without ATI’s credit cover, to enter the African market. And, in the case of one transaction in Benin, both the IMF and S&P Global Ratings agency acknowledged the positive impact in reducing Benin’s debt profile.
ATI has also been at the forefront of encouraging its member countries to obtain external ratings, which has helped to remove another barrier to competitively priced commercial financing. In the coming months, ATI plans to increase its focus on supporting member countries to create frameworks that bring them more in line with the ESG (Environmental, Social and Governance) and other requirements of global investors in order to help its member states attract more foreign direct investment.
In addition to ATI’s projected record financial results, the company has also posted impressive achievements in a number of areas:
QUOTE from John Lentaigne, Ag CEO of ATI
“2019 has been a game-changing year for ATI. Thanks to the support and dedication of a capable and hard-working ATI team, we were able to achieve results that reflect the innovations and opportunities that are widespread throughout the continent. I am particularly pleased that we helped raise so much awareness of the tremendous possibilities for trade and investment in Africa.”
QUOTE from Benjamin Mugisha, Ag CUO of ATI
“This year ATI, proved to itself and to the world that it is a global player. For example, our guarantees have supported African governments’ access to international financing at competitive rates, through a transparent process. ATI’s growth is a reflection of the fact that lenders, traders and investors in Africa, both traditional and non-traditional, know ATI is key to unlocking opportunities on the continent. We remain committed to providing value to all our stakeholders, and look forward to delivering even more support to our increasing roster of member governments in the coming year.”