Benin targeted to attract US$760 million in investments
COUTONOU, 14 December, 2016 – Benin is encouraging investments and public private partnerships to address many of its current challenges. One challenge, rapid urbanisation, has sprouted many others. Coutonou has ballooned from a population of 150,000 in 1960 to 3 million today. This has led to a need for better infrastructure such as roads and housing and a need to stabilise environmental stresses. The solution for many of these challenges is increased investments, but for African governments, attracting capital can have costly consequences, such as an increased debt load.
At a workshop held today for government agencies, the African Trade Insurance Agency (ATI) outlined how it could support the government’s agenda to attract more investments by providing a substitute to government guarantees and providing products to protect investors. With an estimated US$760 million (FCFA 467 billion) worth of investment and trade projects in their current pipeline for Benin, the company is confident that they could have a real impact on Benin’s economic development. The workshop and ATI had the full support of the government, which also organised high-level meetings between ATI’s CEO, George Otieno, the Ministers of Development, Finance and Commerce in addition to the President of the Republic, H.E. Patrice Talon.
In 2013, Benin became the first West African country to join ATI, a pan-African institution that provides political, investment and commercial risk insurance products. ATI offers many benefits to its African member countries including helping governments to attract more private investments into public sector projects such as infrastructure, to access credit on favourable terms, to offer an alternative to government guarantees, which helps to reduce the country’s debt load, ameliorate the impacts of climate change through investments, and, importantly, ATI provides comfort to financial partners interested in investing in Africa.
“It is important for the business community and government agencies in Benin to understand that ATI provides a comprehensive solution. For example, if the energy ministry wants to attract world-class power producers, the government will typically need to provide security. This is where ATI can step in to protect the investor against risks that include non-payment by the government. This type of security and peace of mind is crucial for most international companies and investors,” notes George Otieno, the CEO of ATI.
To date, ATI has supported projects that have included helping local companies access credit and other banking services of up to US$4 million (FCFA 2.4 billion), and helped a local company import agricultural equipment to scale up their exports in a transaction valued at US$2 million (FCFA 1.3 billion). With an impressive pipeline and growing demand, ATI expects to have a big impact on Benin’s economy in the next few years.