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Etihad Credit Insurance (ECI), the Emirates Federal Export Credit Corporation and the African Trade Insurance Institute (ATI) have signed a mutual reinsurance agreement to strengthen trade links and facilitate exports between the two markets. This is achieved by providing businesses with trade credit insurance and trade finance solutions.
The deal follows a Memorandum of Understanding (MoU) signed by the entities last March and aims to improve export credit and trade finance solutions by raising awareness among exporters and encouraging them to use risk mitigation tools to address commercial and political risks. global competitiveness.
According to the agreement signed by Massimo Falcioni, CEO of Etihad Credit Insurance, and Manuel Moses, CEO of ATI, the two organizations aim to support joint ventures between the UAE and Africa in their respective countries, as well as their joint ventures in other countries, by sharing risks, This enables these companies to develop trade on a global scale.
State Guarantee
Falcioni emphasized the importance of this strategic alliance, saying: “The UAE and the African continent enjoy a glorious historical bilateral trade relationship and we at ECI are proud to strengthen this tradition with the support of ATI. Provide real confidence in accessing the diverse markets and resources of the African region, with state-backed guarantees and safeguards against commercial and political uncertainty.”
Moses said: “This transaction with ECI is an important step in strengthening our commitment to provide risk solutions to corporates, investors and commercial lenders interested in doing business in the UAE and Africa. Deepening our ongoing partnership, this The reinsurance agreement will provide businesses with unparalleled trading opportunities to enhance their regional and global competitiveness.”
Trade between the UAE and Africa has grown steadily in recent years, with the UAE investing in 71 different projects worth $5.64 billion last year, making it the fourth-largest investor in Africa, according to research consultancy Knight Frank. Non-oil trade between the UAE and Africa reached $40.7 billion in the first nine months of 2020, compared to $36.9 billion in the same period in 2019, according to data published by the Emirates News Agency (WAM). Trade volume reached US$50 billion, compared to US$33 billion in 2015.
high growth industry
The UAE specifically seeks to capitalize on the African nation’s many high-growth sectors, including tourism, infrastructure, energy, transport, logistics and IT.
Most recently, ECI partnered with Israel Export Insurance (ASHRA) to provide a buyer’s credit guarantee for a AED540 million (US$147 million) healthcare project in Ghana, which involved the construction of four hospitals and a central medical storage facility in the country. The project aims to strengthen Ghana’s healthcare facilities and is expected to benefit more than 3 million Ghanaian citizens.
ECI, in partnership with its UK counterpart UK Export Finance (UKEF), is also supporting a major initiative in the Republic of Senegal to strengthen its national emergency response sector. The AED 540 million project, called Redco Project Senegal, is being financed by Standard Chartered Bank with part of a direct loan from UKEF and is backed by ECI under a reinsurance agreement with UKEF worth AED 348 million.
common market country
ATI was established in 2001 by seven Common Market for Eastern and Southern Africa (Comesa) countries with technical and financial support from the World Bank to insure businesses and exporters against political and commercial risks to attract foreign direct investment into the region .
As the largest economic bloc in African countries with 21 member states, Comesa will grow into one of Africa’s most promising markets, with an estimated 600 million consumers by 2025. Trade between the UAE and these countries has continued to grow in recent years, and by positioning itself as a major hub for trade in and out of the region, the UAE has paved the way for attracting investment from around the world.
ATI is a key member of the Berne Union (BU) – the leading international organization and community of export credit and political risk insurers – providing approximately $2.5 trillion in payment risk protection to banks, exporters and investors annually , accounting for more than 13 percent of global cross-border trade. This month, ATI also hosted the Berne Union’s 2022 Annual General Assembly in Kigali, Rwanda, in line with BU’s strategic focus on promoting the role and potential of export credits in sub-Saharan Africa. — trade arab news agency
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