The government of Togo announced completion of the country’s membership in the African Trade Insurance Agency (ATI), becoming the 18th African sovereign shareholder
Reflecting the important role that ATI plays in the region’s economic growth, the European Investment Bank (EIB) provided a US$12.5mn concessional loan to cover Togo’s shareholding in ATI. The complete US$37.5mn financing package, finalised by EIB in 2019, covers the shareholdings of Niger, Togo and Cameroon, with Cameroon’s completed membership to be announced imminently and with additional financing possible for more countries to join in 2020.
The membership in ATI provides African countries with additional trade and investment insurance capacity and improves risk rating for sovereign debts; adequate insurance capacity critical component to cushioning against negative economic impacts of COVID-19.
“As we ready ourselves to manage the economic fall-out from the coronavirus, African governments are focused on mitigating the short and long-term impacts. Insurance capacity is an important aspect of our ability to rebuild and to ensure that critical projects receive the funding and guarantee support they require. We see membership in ATI as a necessary component in our ability to shore up the economy and to weather this storm,” said Sani Yaya, minister of economy and finance in Togo.
“The membership of Togo pushes ATI one step closer to achieving full pan-African membership from countries from coast to coast. The COVID-19 crisis increases the relevance of African development finance institutions such as ATI. As the world struggles to get a handle on this fast moving pandemic, the combined resources of African institutions will be needed to effectively counter this newest threat to Africa’s development,” said John Lentaigne, acting CEO of the African Trade Insurance Agency.
In tandem with the country finalising its shareholding, ATI backed Togo’s first access to international financial markets, with the country obtaining a quasi-concessional 10-year loan to reprofile and refinance a portion of its short-term and more expensive public debt. Togo was able to use ATI’s credit wrap to package the debt, helping the country achieve a borrowing rate in the low single digits.
“Close cooperation between African and European partners is key to successfully reduce the unprecedented impact of COVID-19 and tackle the negative economic impact of the virus both globally and in more vulnerable economies. Regional partners such as the African Trade Insurance Agency play a valuable role supporting economies across Africa by providing the insurance that helps to maintain investment and trade flows at a time when these are most needed,” noted Ambroise Fayolle, vice-president of the EIB.
