Industry and Commerce Minister Mike Bimha
GOVERNMENT says it has mobilised the US$15 million required to become a paid up member of the African Trade Insurance Agency (ATI) and hopes to have finalised the whole arrangement before the end of this year.
Industry and Commerce Minister Mike Bimha said the country is expected to become a beneficial member of the organisation once the money has been transferred to ATI since all other process have been completed.
“The money has been secured and the process is now on transferring the money to ATI. Finance Minister Patrick Chinamasa indicated that they are working to ensure the arrangement is finalised before the end of this year,” he said.
According to Bimha, raising of the capital was expedited by the Ministry of Finance and the Reserve Bank of Zimbabwe (RBZ). The central Bank was to raise $10 million while the African Development Bank (AfDB) would chip in with $5 million.
Bimha said Parliament has since ratified the ATI treaty which is one of the pre- conditions to join ATI.
ATI, Africa’s export credit agency, provides political and trade credit risk insurance products with the objective of reducing business risk and cost of doing business on the continent. ATI aims to help increase investments into African member countries and two-way trade flows between Africa and the world.
Zimbabwe is regarded by foreign investors as a high political and credit risk country therefore subscription to ATI will to some extent neutralise the perception. Analysts say ATI’s membership would enhance Zimbabwe’s capacity to borrow from international financial markets by significantly reducing the country’s sovereign risk premium arising from negative perception by the international community.
If Zimbabwe becomes a full member, it will have access to about $1 billion for infrastructure development.
Other members of the insurance agency include apart from AfDB include COMESA, African Reinsurance Corporation and the Eastern and Southern African Trade and Development Bank (PTA Bank), the PTA Re Insurance Company (Zep Re), among others. FinX
Follow us on Twitter @FingazLive and on Facebook – The Financial Gazette