SACE an Italian provider of credit management is set to open shop in Rwanda and by July had purchased 100 shares in the African Trade Insurance Agency (ATI) valued at $10 million. The investment was aimed at supporting Italian companies trading in Africa and Rwanda as well. RUTH KANG’ONG’OI talked to acting CEO of ATI, Stewart Kinloch about the company’s trends.
What does the ATI/SACE partnership mean for Africa?
The ATI/SACE partnership will ultimately help to attract more foreign investors to the continent. Through SACE, Italian investors will have a secure path to African markets while African exporters will also be able to take advantage of opportunities to export to the Italian market.
This aspect supports one of our primary objectives of bringing foreign investors to Africa. We’ve already paved the way for other international partners like Lloyd’s of London to enter into more business in the African market.
All indications are pointing to a more critical role for foreign investment to the economic well-being of African countries.
The global credit crunch has forced drastic reductions in foreign aid, remittances and other sources of income.
As a result, Africa has been labeled a victim of the global downturn but, in my view, the global recession presents a great opportunity for Africa to become pro-active about its future.
Now is the time for countries to rethink their overall growth strategies.
They can work to their strengths and even explore new areas in order to create demand in sectors that are less dependent on market forces.
ATI’s presence can help these countries to safely explore new export markets and we also hope to send a signal to the world that Africa is open for business.
To investors we are saying, ‘come and do business here because we are more than able to take on many of your risks’.
What progress has been made since the partnership?
We continue to field enquiries from SACE for insurance that to-date equal a gross exposure of about $60 million and we are just concluding a deal in the Democratic Republic of Congo worth about $15 million.
Both ATI and SACE expect the partnership to reap fairly sizable returns for both organizations, with Africa being the ultimate beneficiary.
What projects has ATI covered in Rwanda?
This year 2009 has been a great year for ATI in Rwanda. We closed our first deal in Rwanda in July, which was a Terrorism and Sabotage insurance product, similar to the product that we launched in Kenya with UAP last year.
In addition to this, there are several pipeline projects in the works.
One project that I can tell you about that recently closed is the Soyco project, which will be the first Soy processing plant to be built in Rwanda.
This is significant because, where Rwanda was forced to import processed oil in the past at rates that were determined by the wider market, it will now be able to reap the benefits of increased foreign dollars from its own exports of soy oil, while satisfying domestic demand.
This project demonstrates the path that Rwanda is taking to retool and regroup its growth strategy with a view to being in a better position to take advantage of the post-global recession opportunities.
We’re excited about this project also because of the spin-off effects it will have on the local farmers.
For example the farmers in and around the project site will benefit from a new irrigation system that will help improve their yields.
This kind of impact that helps local communities is what we strive for in all of our projects, no matter how small or large.
If a local farmer can benefit then I think this is an indication that we are making a positive difference.
ATI along with the project sponsor, Clinton-Hunter Foundation and KCB Bank will be holding a joint press briefing on 14 October to officially launch this project in Kayonza.
African Trade Insurance Company participated in Rwanda international Trade Fair where they shared a stand with RDB.
They were targeting both local and international investors. ATI has been in operations in Rwanda since 2006.
Do you have any comment on the ‘Doing Business Report 2010’, where Rwanda emerged as the top reformer in setting up a conducive business environment?
First of all, let me clarify that at the moment, we do not have an office based in Rwanda but we are hoping to launch one within the very near future.
In response to your question, this tremendous upwards movement in Rwanda’s ranking in the most current ‘Doing Business Report’ bodes well for business.
A country can implement reforms that simplify processes for business development activities everyone benefits.
From the owner of small businesses who may be able to access more financing options to the foreign investor who will spend less time and resources in implementing projects, which makes the country much more attractive as a business destination.