FDI flows to Africa threatened by global economic uncertainty – governments and investors gather to discuss possible solutions

APO News from Africa:

FDI flows to Africa threatened by global economic uncertainty – governments and investors gather to discuss possible solutions:

At a Roundtable event in Nairobi, Ministers from across Africa sat together with investors and the private sector to determine how best to tackle the investment and credit risk hurdles in order to make African risks bankable. Participants to the Roundtable see the event as timely because it comes at time of geopolitical uncertainties which, according to The World Bank, could lead to “higher borrowing costs or cut off capital flows to emerging and frontier markets”.

For African governments part of what is at stake are much needed foreign direct investments and access to affordable financing necessary to spur development and, specifically, to close the estimated USD900 billion infrastructure gap. Equally, the private sector stands to lose billions of dollars in lost opportunities if the requirements for a favourable investment environment are not adequately addressed.

The half day forum, the 4^th Roundtable to focus on Political and Credit Risks in Africa, took place on the side lines of the African Trade Insurance Agency’s (ATI) (www.ATI-ACA.org) Annual General Meetings. The event opened with pointed remarks from H.E. Patrice Talon, President of Benin:

« Le partenariat public-privé s’impose donc comme la réponse aux besoins d’investissement structurants de nos États. Se présente alors la nécessité de disposer d’outils appropriés permettant des investissements malgré la persistance de la perception de risque élevé en Afrique. Dans ce contexte, l’assurance-crédit constitue entre autres un outil efficace pour répondre à ce défi. »

Subsequent discussions focused on possible solutions to the challenges facing governments from the private sector and export credit agencies from panellists such as:

• Hon. Patrick Chinamasa, Minister of Finance & Economic Development, Zimbabwe
• Hon. Romuald Wadagni, Minister of Economy & Finance, Benin
• Hon Felix Mutati, Minister of Finance, Zambia
• Chamsou Andjorin, Director Government Affairs & Market Development, Boeing Intl.
• Helen Mtshali, Syndication Lead – Sub-Saharan Africa, Industrial Finance Solutions, GE
• Nisrin Hala, Sr. Director, Global Trade Finance Bus. Devpt. Emerging Markets, SMBC

Investors are not immune to political and social developments in emerging regions like Africa. In fact, with reduced earnings – the benchmark emerging-market stock index has lost approximately 4 percent annually since 2010 from a high of 22 percent annual return in the preceding decade – investors are now focusing on more than the bottom line in these markets. During the boom years of the last two decades, Africa was experiencing unprecedented GDP growth rates but depressed commodity prices have seen growth in the sub-Saharan Africa region slow to 1.5 percent rate in 2016. According to World Bank estimates, oil exporters account for most of the slowdown owing to their two-thirds contribution to regional output.

In a Bloomberg article published in March 2016, emerging market investors from some of the most prominent companies noted the dramatic change in their investing tactics due to global fragility, which they see as unveiling institutional weakness, corruption, poor governance and efficiencies. In this current climate, investors are now keenly tracking social indicators such as corruption rankings, gender parity and the extent that rule of law is respected within emerging markets.

“Africa is in a period of realignment in this new global order but I don’t think anyone should bet against its resilience. We are still home to some of the fastest growing economies in the world – as of 2017, the World Economic Forum ranks Côte d’Ivoire, Tanzania and Senegal on the list of the top ten fastest growing economies in the world,” notes George Otieno, ATI’s CEO.

In this climate, it is more imperative than ever for African governments to focus on economic diversity to maintain growth while addressing risks to investors. As an internationally respected African institution, the African Trade Insurance Agency (ATI) offers the ideal solution precisely because the company has strong relationships with governments and because its risk assessments and mitigation solutions are seen as credible by global financiers and investors. With ATI involved in a transaction, governments are able to provide security to investors and suppliers against a range of investment risks.

In 2016, ATI insured close to USD2 billion (KES202.8 billion) worth of trade and investments and the company is increasingly supporting some of the continent’s most important transactions such as Ethiopian Airline’s fleet expansion and a USD660 million investment in Lake Turkana, Africa’s largest wind farm and, to date, the single largest investment in Kenya.

In this environment, ATI’s products are being seen as a valuable tool to enable lenders to take sub-investment grade risk in Africa thus allowing governments and corporates to access more affordable financing. Importantly, in its role as an investment insurer of last resort, ATI is also providing the necessary comfort to support continued investments into the continent amidst a period of uncertainty. 

Distributed by APO on behalf of African Trade Insurance Agency (ATI).

Press Contacts:  
Sherry.Kennedy@ATI-ACA.org
Mobile +254 714 606 787  

About The African Trade Insurance Agency:
ATI (www.ATI-ACA.org) was founded in 2001 by African States to cover the trade and investment risks of companies doing business in Africa. ATI provides Political Risk, Surety Bonds, Trade Credit Insurance and Political Violence and Terrorism & Sabotage cover. As of 2016, ATI has supported USD25 billion in trade and investments across Africa in sectors such as agribusiness, energy, exports, housing, infrastructure manufacturing, mining and telecommunications. ATI has an ‘A/negative’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s.

Source: APO – Africa-Newsroom: latest news releases related to Africa

Mediation in Libya: Gabriel meets Algerian Foreign Minister Lamamra:

Foreign Minister Gabriel met Algerian Foreign Minister Ramtane Lamamra in Berlin on Tuesday (9 May). Their talks focused on the continuing crisis in Libya. Algeria, whose eastern border is shared with Libya, is intensely committed to mediation in the country, which is being torn apart by internal power struggles. 

Haven for human traffickers and arms smugglers 

In the wake of the fall of the brutal dictator Muammar Gaddafi, Libya split into areas under the influence of various rival militias and parts of the army. Islamist terrorist militias like the so-called Islamic State trickled into the country. Whole regions of Libya have become a haven for human trafficking rings and arms smugglers. At least a million migrants and refugees are stuck in Libya, some of them being detained under catastrophic conditions by human traffickers. 

Germany counting on the United Nations 

The international community has been trying for years to stabilise the country. Germany is supporting the United Nations in its endeavours to form a viable Government of National Accord in Libya. In this connection, Gabriel today also met Martin Kobler, the United Nations Special Representative for Libya and a German national. Neighbouring countries like Algeria with contacts to all political camps in Libya have an important role to play in the mediation efforts. Representatives of Libya’s neighbouring countries have arrived in Algiers in recent days to sound out the possibilities for new steps forward with mediation. 

Europe is affected too 

Gabriel thanked Foreign Minister Lamamra for these mediation efforts and called on all parties involved to continue the dialogue. “The instability in Libya is a danger for its neighbours, too, and also affects Europe. That is why we need to speak with one voice at last,” said Gabriel. As one of the largest Western donors, Germany finances numerous humanitarian assistance, reconstruction and stabilisation projects in Libya. Together with the EU and the UN, Germany is particularly committed to improving the humanitarian situation for migrants in the country.

Gabriel and Lamamra also discussed German-Algerian relations. “We are very keen to give young people in your country prospects for the future,” Gabriel said. For this reason, Germany will step up support for education institutions in Algeria and seek to intensify cultural exchange between the two countries.

Distributed by APO on behalf of Germany – Federal Foreign Office.

Source: APO – Africa-Newsroom: latest news releases related to Africa

The UK hands over the newly constructed Murray Town Jetty to Sierra Leone:

At an opening ceremony in Murray Town, the British High Commissioner, Mr Guy Warrington, was pleased to handover the new purpose-built Murray Town Jetty to the Republic of Sierra Leone Armed Forces Maritime Wing. Speaking at the event, he said: “Murray Town Jetty will provide a safe and secure berth for the nation’s maritime capacity, and is vital to a coordinated response to the proper regulation of waterborne industry to combating a variety of maritime threats from illegal, unlicensed & unregulated fishing to smuggling & illegal migration”.

Receiving the jetty on behalf of the Government of Sierra Leone was the Deputy Minister of Defence, Captain (retired) Abdul Kamara, and the Chief of Defence Staff, Lieutenant General John Milton. They were joined by representatives from the security sector and the international community.

Murray Town has been at the centre of the country’s maritime development and is the home of both the Maritime Wing and the Police Marine Division. Murray Town has quickly built up its reputation as a centre of maritime excellence and is home to the Joint Maritime Committee Headquarters – the first maritime coordination centre in West Africa, which brings together national maritime agencies to help combat illegal activity off Sierra Leone’s coastline. This diverse family of agencies also includes the Maritime Administration, and the Ministry of Fisheries and Marine Resources.

The proper management and preservation of maritime resources is central to Sierra Leone’s long-term future. The coastline is important for a number of reasons: it offers a source of employment and skills development; its fish stocks are key to food security; and its marine environment has the potential to attract greater numbers of tourists and generate more revenue.

The handing over of the jetty is the most recent example of the UK’s ongoing maritime partnership. In 2010, a UK-funded infrastructure programme, delivered in partnership with the RSLAF Engineers, built the new Maritime Wing Headquarters and rehabilitated the Joint Maritime Committee Headquarters. This investment into Sierra Leone’s maritime security sits alongside the technical assistance from the United States and the financial support from the Isle of Man Government.

Distributed by APO on behalf of British High Commission Freetown.

Source: APO – Africa-Newsroom: latest news releases related to Africa