Nippon Export and Investment Insurance (NEXI) has announced equity investment totaling Ksh 2.07 billion ($14.8m) to the African Trade Insurance Agency (ATI) to become the agency’s newest shareholder.
ATI Chief Executive Officer Manuel Moses says the capital injection from NEXI which is Japan’s export credit agency will help promote Japanese trade and Foreign Direct Investment (FDI) into Africa under the Tokyo International Conference on African Development (TICAD).
“We are confident that as Japan expands its FDIs and footprint into Africa, its membership in ATI will not only improve our institution’s capacity to support trade and investment across the continent, but will also attract more Japanese investors seeking for business opportunities in Africa’s population of over 1.2 billion people in the single market, under the African Continental Free Trade Area (AfCFTA),” said Moses.
NEXI investments stems from TICAD7 Summit held in Japan in 2019 where the two agencies announced the establishment of a “Japan desk” in ATI’s Nairobi office to support African developmental and commercial projects so that Japanese companies can obtain easy access to reliable risk mitigation solutions provided by ATI.
According to the Nairobi-based ATI, the “Japan desk” has promoted support to both Japanese and African business with an active gross exposure valued at $1.1billion in the information and communication, financial and Insurance activities, and construction sectors in Côte d’Ivoire, Egypt, Ethiopia and Nigeria.
“I am truly honored to be able to announce that NEXI is now officially a member of ATI. We are extremely grateful of all the guidance and support from ATI during the entire process. As a member of ATI from this point on, NEXI will continue to work closely with ATI to encourage more Japanese companies to make international trade and investments in Africa,” added Atsuo Kuroda, NEXI Chief Executive Officer.
The Japan desk is also responsible for the 10-year Foreign Direct Investment Risk Insurance cover provided by ATI to Japan’s Sumitomo Corporation on its investment in Safaricom Ethiopia Plc where NEXI provided reinsurance support to ATI.
Safaricom Ethiopia Plc which is a joint venture between Kenya’s Safaricom Plc, Sumitomo Corporation, CDC, Vodacom and UK Sovereign Investment Fund is one of the single largest Japanese Foreign Direct Investment (FDI) in the Africa and Ethiopia.
On the other hand, ATI has provided insurance policies to protect some of Japan’s private sector against the risk of non-payment on transactions valued at Ksh 686 billion ($4.9b).
Some of this financing has helped African countries to reprofile short-term and unaffordable foreign and local debts, into longer tenures and more affordable debt servicing for African Governments.
With the completion of membership, ATI expects to support many more Japanese manufacturers, traders, exporters and financial institutions seeking for business opportunities and market access across Africa in the coming years.
