So, you think Tanzania is a risky place to do business,
DAR ES SALAAM, 26 June, 2012 – The African Trade Insurance Agency (ATI) in partnership with the Tanzania Private Sector Foundation (TPSF) today launched “ATI Week”, which will end with a cocktail event on Friday, 29th June, where the two organisations will present an award to the Bakhresa Group for their significant contribution to cross-border trade. The week-long marketing campaign is designed to raise awareness through media ads and interviews, and workshops, about the tools and services being offered to Tanzanian companies. Both ATI and TPSF aim to strengthen the business environment in order to help attract more investments and trade into Tanzania.
“The Government of Tanzania, like most East African governments has set out a list of economic targets they would like to achieve by 2025. This plan is known as Vision 2025. We are here to stand behind the government in their plans – to support their efforts to build strong local companies and to attract investments,” commented George Otieno, ATI’s Chief Executive Officer during a press conference to launch the campaign.
“TPSF has been partnering with ATI in Tanzania since 2008. ATI’s insurance/guarantees against non-payment and political risks have helped the TPSF to offer unique solutions to its members and to the business community. With more awareness about these products, we expect to reduce the private sector’s risk exposure so they can feel confident enough to take bolder steps towards expansion,” added Godfrey Simbeye, the Executive Director of TPSF.
ATI provides insurance/guarantees to protect projects, contracts, investments and other business transactions against non-payment risks and risks that involve the government – known as political risks. As a founding member and shareholder of ATI, Tanzania has benefited from ATI’s products. With the presence of a local office since 2010 that is headed by Albert Rweyemamu, the Resident Underwriter – ATI’s Tanzania office facilitated over $1 billion worth of investments and trade into the country in 2011. These projects ranged from constructing roads and buildings to power plants as well as cover to a $200 million financing facility for infrastructure projects.
“The Euro zone debt crisis is actually an extension of the global financial crisis that began in 2008/2009. In this current phase of the crisis, we are already seeing that the impact will be harder on Africa than the previous cycle because now European banks are pulling their financing or are making it very difficult for Africa to access financing. As a result, banks are now accounting for one of our major clients – ATI covered a record $900 million worth of regional bank-financed transactions in 2011,” noted Mr. Rweyemamu.
The main challenge that ATI faces is getting the word out about their products, which the campaign hopes to solve. ATI fills a unique space in the world of insurance/guarantees. For instance, companies wishing to expand their business into new markets outside of Tanzania may be exposed to non-payment risks from clients or buyers they do not know. ATI can play a role by giving these companies the comfort of knowing they will be reimbursed if their client fails to pay them. This peace of mind can be the difference between a company deciding to expand or stay in its home market.
“There is a trillion dollars worth of business in regional markets. What we try explain to companies is that they don’t have to leave Africa to expand. There is plenty of opportunity right here for everyone as long as your risks are covered,” explained Mr. Rweyemamu.
In accepting the award for their contribution to enhancing cross-border trade in the region, the Bakhresa Group of companies provides the greatest example of what can be achieved in Africa. The G-20 recently honoured the company in a ceremony in Mexico, along with 14 other companies from around the world for their business innovation in addressing the needs of low-income people. Mr.Abubakar Bakhresa, Executive Director of one of the group of companies accepted the award on behalf of the Managing Director.
Bakhresa, acclaimed as Tanzania’s number one consumer brand, has grown from its humble beginnings as a restaurant in Dar es Salaam in the mid seventies to an operation with a turnover of more than $300 million and a staff of over two thousand in Tanzania, to Uganda, Kenya, Malawi, Zambia and Mozambique.
ATI is the highest rated insurer in Africa with an ‘A/Stable’ rating from Standard & Poor’s earned for the past four consecutive years. This standing gives investors the confidence they may need to put their money into Africa, it also helps ATI to attract more insurance capacity through partnerships with international insurers.