Global fragility, corruption and poor governance are some of the threats facing Foreign Direct Investment (FDI) flows to the continent, a 2016 Bloomberg article has revealed.
Africa needs FDIs and access to affordable financing to spur development, specifically to close the $900 billion infrastructure gap; while its private sector stands to lose billions of dollars in lost opportunities if the investment environment is unfavourable.
As investors in emerging markets including Africa continue to change their investing tactics, African governments, private sector players and investors gathered in Nairobi for a roundtable event to explore ways to mitigate the investment and credit risk challenges facing Africa to make them bankable.
The 4th Roundtable on Political and Credit Risks in Africa took place on the sidelines of the African Trade Insurance Agency’s (ATI) Annual General Meetings held in Kenya.
George Otieno, CEO, ATI noted, “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.”
However the current climate calls for African governments to address risks to investors and to diversify their economies to maintain growth.
The ATI offers risk assessments and mitigation solutions deemed credible by global financiers and investors. Its involvement in transactions enables African governments to provide security to investors and suppliers against a range of investment risks, making it a valuable tool for allowing governments and corporates access more affordable financing.
In 2016, ATI insured close to two billion worth of trade and investments. It is supporting Ethiopian Airlines’ fleet expansion and the single largest investment in Kenya- a $660 million wind farm in Lake Turkana which will be Africa’s largest.
As an investment insurer of last resort, the ATI provides the necessary comfort to support continued investments into the continent.
President Patrice Talon of Benin opened the event where other discussions focused on solutions to the challenges African governments face from the private sector and export credit agencies.
Panellists included Patrick Chinamasa, Minister of Finance & Economic Development, Zimbabwe; Romuald Wadagni, Minister of Economy & Finance, Benin; Felix Mutati, Minister of Finance, Zambia; Chamsou Andjorin, Director Government Affairs & Market Development, Boeing International; Helen Mtshali, Syndication Lead- Sub-Saharan Africa, Industrial Finance Solutions, GE; and Nisrin Hala, Senior Director, Global Trade Finance Business Development Emerging Markets, SMBC.