ATI’s CEO Calls for Stronger Trade Relations between the Arab World and Africa at the 4th COMESA Investment Forum
DUBAI, 23 March, 2011 – A trend towards increased trade between emerging market economies could help Arab and North African countries rebound once the political turmoil subsides, noted George Otieno, CEO of the African Trade Insurance Agency (ATI), Africa’s primary export credit agency. Mr. Otieno was speaking at an annual Forum aimed at increasing trade and FDI between the Middle East and North Africa region with the 19 Eastern and Southern African countries in the COMESA trading bloc of 430 million people and a combined GDP of $447 million.
“The stock exchange drops we’ve seen in recent weeks is a signal of decreased investor confidence based on the fear of contagion. In Dubai, the Benchmark DFM General Index slumped to seven year lows recently with a chance that the region’s power house, Saudi Arabia, and others will be similarly impacted. At this Forum, our main message to the region’s investors and exporters is that Africa represents a ready market for their goods and investments,” commented Mr. Otieno.
Drawing from lessons learned in Africa, such as the post Kenyan political violence and the controversial mining licence reviews in the Democratic Republic of Congo, ATI has protected investors and exporters in high risk situations, similar to the current turmoil spreading throughout the Middle East and North Africa. In the current environment, risk premiums for Arab exporters has jumped by as much as 20 percent, according to Dubai’s Credit Insurance Company.
ATI offers political and trade credit risk insurance to protect against risks from political upheaval to risks impacting exporters such as non-payment. The Pan African institution is hoping to capitalize on the trend toward increased Arab-Africa trade. The Gulf Cooperation Council, one of the primary economic groupings in the region for example, posted a 170 percent growth in trade with Africa from 2000 to 2009 – up from $6.8 billion to $18.1 billion.
“In the past year, ATI has signed Memorandums of Understanding with Egypt through the Export Credit Guarantee Company; with Saudi Arabia through the Saudi Fund for Development, and earlier this month with the Islamic Cooperation for the Insurance of Investment and Export Credit. These Agreements signal our strategy to break open the trade potential we see here,” stated Mr. Otieno.