Fast-track ATI membership -Govt told
Operators in Ghana’s insurance industry have appealed to the government to accelerate processes to join the African Trade Insurance (ATI) Agency in order to mitigate the risks faced by investors and others who want to do business in the country.
Joining Africa’s only multilateral trade and investment credit agency, which is backed by the World Bank, will provide Ghana one of the most important risk mitigation mechanisms to allay the fears of international investors and facilitate the flow of foreign direct investments.
Interacting with the media in Accra, heads of the insurance industry in Ghana appealed to the government to complete the process of becoming a member of the ATI in order to support Ghana’s economic growth.
ATI, which was founded in 2001 by African governments, currently has 11 members. It has supported trade and investments in member countries to the tune of $10 billion. Benin and Ghana started the membership process simultaneously. While Benin is now the latest ATI member, Ghana’s membership, which was scheduled for completion in 2012, was slowed by its national election.
Foreign Direct Investment Flow
The President of the Ghana Insurers Association, Mr Kwame-Gazo Agbenyadzie, said it was generally perceived that the risk profile of the sub-region, compared to that of similar emerging markets in the world, was higher as a result of political and investment risk factors.
Foreign investment, he said, would, however, flow to the region where risk could be easily mitigated, with returns being commensurate with risk and safety of capital could be guaranteed.
He said joining the ATI would bolster investor confidence and provide the much needed insurance capacity for political and investment risks. ‘The products and the capacity required for these are very limited here,’ he said.
Mr Agbenyadzie said Ghana would benefit from approximately $100 million financial support that the ATI would pump into the Ghanaian insurance market.
‘This added capacity will enhance the underwriting capacity of the market and ensure that premiums remain in Ghana.’
‘Our economy has every potential to grow and expand in the next few years and our insurance industry must be positioned to take advantage of the local content provisions in our legislation relating to insurance by providing internationally acceptable securities.’
Political risk insurance
The Chief Executive Officer of ATI, Mr George A. Otieno, said the ATI had the ability to insure directly, reinsure and co-insure and that it provided political risk insurance which protect companies against illegal acts of a government that might cause them loss of property or income or losses arising from political violence and terrorism.
ATI, he said, also protected companies against the risk of non-payment by corporate clients and reinsurance support on bonds among other services.
Capital for Investment
The Chief Executive of the Private Enterprise Federation, Nana Osei Bonsu, implored the government to use its leadership in the Economic Community of West African States (ECOWAS) for the regional economic group to fast-track discussions to use ATI services.
He stated that opportunities in the insurance sector, if adequately explored, could yield vast amounts of capital for investments in Ghana.
By Emelia Ennin Abbey/Daily Graphic/Ghana
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