NAIROBI– The African Trade Insurance aGENCY, a multilateral organization majority owned by African governments, has reported a 55 per cent increase in 2017 full-year profits to 990 million Kenya shillings (about 9.8 million US dollars), driven by steady business expansion.
The Nairobi-headquartered agency is targeting to offer cover for large and strategic capital projects of at least 35 billion shillings over the next one year, says Chief Executive Officer George Otieno in the 2017 annual report. The move will allow African states to negotiate for better terms when accessing foreign capital for development projects.
Africa is estimated to be in need of at least six trillion shillings annually to bridge infrastructure gaps and a huge percentage of this amount is expected to come from the private sector and loans which have pushed some of the countries to their debt limit.
According to the risk solution provider ATI, the cost of borrowing for capital expenses is still high as debts accrued through bond markets and syndicated loans account for 60 per cent of public debt in Africa.
The insurer is now seeking to help reduce this cost through an alternative to raise foreign currency debt. This targets projects of between 25 to 35 billion shillings.
Supported by expansion into various AfricaN markets, the insurer has seen its gross written premiums surge 52 per cent to 4.48 billion shillings while equity is at 24.2 billion shillings.
The volume of business supported since inception has similarly risen 40 per cent to 3.5 trillion shillings as gross exposure rose 23 per cent to 240 billion shillings.
Source: NAM NEWS NETWORK