Tuesday, May 28, 2024

Japan’s NEXI acquires stake in African Trade Insurance Agency, ATI

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Nelson Oko
Nelson Oko
Based in Nigeria, Nelson Oko is a features editor at Real Simple where he manages the publication’s personal finance, career, product testing and pets coverage. His work has also been seen in Travel + Leisure, Better Homes and Gardens, Southern Living and more.

Japan’s Export Credit Agency, Nippon Export and Investment Insurance (NEXI) is the newest shareholder of the African Trade Insurance Agency (ATI) having joined the Pan-African Guarantee Institution, with a USD14.8 million capital injection. This equity investment reinforces the long-standing and ever-growing cooperation between Africa and Japan under the Tokyo International Conference on African Development (TICAD) auspices with ATI and NEXI promoting Japanese trade and Foreign Direct Investment (FDI) into Africa.

Welcoming NEXI ATI Chief Executive Officer Manuel Moses said:

“I sincerely congratulate NEXI for becoming the newest institutional shareholder of ATI. In recent years, ATI and NEXI have held a strong working relationship towards promoting trade and investment between Japan and Africa under the auspices of TICAD and I am happy that our strategic collaboration has culminated into NEXI’s equity investment in ATI as shareholder. 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).”

Commenting on ATI’s membership, NEXI Chairman and CEO Mr. Atsuo Kuroda said: 

“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.”

During the TICAD7 Summit hosted in Japan in 2019, the two organizations 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. To date, the “Japan desk” has promoted support to both Japanese and African business with an active gross exposure valued at USD1.1 billion in the information & communication, Financial & Insurance activities, and construction sectors in Côte d’Ivoire, Egypt, Ethiopia and Nigeria.

NEXI’s shareholding in ATI, and strategic presence in Africa as an investor, provides reassurance to Japanese financial institutions and prospective investors seeking business opportunities on the continent. As Japan continues to expand its footprint in Africa, we are confident that this membership will greatly enhance both parties with additional capacity for ATI to underwrite strategic transactions and promote economic development across Africa.

The Japan desk initiative recently supported a strategic development project; a 10-year Foreign Direct Investment Risk Insurance cover provided by ATI to Japan’s Sumitomo Corporation on its investment in a new telecommunication company in Ethiopia – Safaricom Telecommunications Ethiopia Plc (STE), where NEXI provided reinsurance support to ATI. The project is one of the single largest Japanese Foreign Direct Investment (FDI) in the continent and Ethiopia specifically.

In recent years, ATI has provided insurance policies to protect some of Japan’s private sector against the risk of non-payment on transactions valued at USD4.9 billion. 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.

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