Ghana has signed first financing agreement under the Reform and Investment Partnership with Germany to become a member in the African Trade Insurance Agency.
Membership into African Trade Insurance Agency (ATI) will help mitigate risk thereby unlocking additional investment into the region which will eventually help to lower Ghana’s borrowing costs and increase investments.
At a ceremony in Accra, the first financing agreement under the Reform and Investment partnership between Germany and Ghana in the amount of 16 million EUR was signed between the Ministry of Finance and the German Development Bank KfW .
The funds provided by the German Development Cooperation under the Reform and Investment partnership enable Ghana to complete its membership in ATI.
Membership in ATI will provide Ghana with increased access to insurance products that will help mitigate risk to investors in both debt and equity.
The ATI membership will enable Ghana to secure its shareholding and membership into the African Trade Insurance Agency (ATI), a multilateral investment guarantee institution that mitigates investment risks into Africa.
Ghana’s shareholding in ATI enables the government to further develop the private sector, which is a key reform agenda under the Reform and Investment Partnership Agreement between Ghana and Germany.
Ghana will leverage on its membership with ATI to access insurance cover for billions of dollars of investment going forward. As Ghana is becoming a full member, ATI will now be able to insure much greater volumes of transactions in Ghana, which are currently valued at approximately US $4 billion. ATI insures investors against non-payment and non-honouring of sovereign and corporate risks. As one of the largest providers of investment and political risk insurance, ATI presently insures upwards of US $6 billion worth of transactions in Africa.
Under the Bilateral Reform and Investment Partnership, the German Development Cooperation has provided the funds for the completion of the ATI membership of Ghana. The Bilateral Reform and Investment Partnership between Ghana and Germany, through the Federal Ministry for Economic Cooperation and Development (BMZ), was launched in 2017. Its purpose is to promote private sector investments and sustainable economic development under the G20 ‘Compact with Africa’. Furthermore, it seeks to encourage a partnership model that is based on mutual trust and accountability.
The signing took place at the Ministry of Finance and was attended by Deputy Minister for Finance, Hon. Charles Adu Boahen, the German Ambassador to Ghana, H.E. Christoph Retzlaff, the Director General and Special Envoy for the Reform and Investment Partnership from Germany, Dr. Stefan Oswald, the Acting CEO of ATI, John Lentaigne as well as the Director for Central Africa and Regional Funds of KfW, Dr. Jan Martin Witte.
Dr. Stefan Oswald, Director General and Special Envoy for the Reform and Investment Partnership said the agreement signed will move Ghana towards a more investor-friendly and sustainable economy, which are both developments that will have a positive developmental impact.
He added the Government of Germany welcomes the opportunity to support Ghana as it continues to make tremendous strides in reforms and transparency that have set an enviable pace for other countries to follow.
On his part, Ghana’s Deputy Minister of Finance Charles Boahen, described the signing ceremony as a significant milestone that reflects the first fruits in Ghana’s partnership with Germany and the G20.
“When our government first signed onto the reform partnership in 2017, our goal was to create a more favourable environment for private investors and to open up opportunities to foreign companies in sectors such as energy, infrastructure and health. To this end, we are confident that membership in the African Trade Insurance Agency will further strengthen Ghana’s appeal to investors,” he added.
Dr. Jan Martin Witte, Director of Central Africa and Regional Funds, KfW disclosed that the agreement is the first Financing Agreement that had been signed under the Reform and Investment Partnership and is also the first Agreement signed by KfW to finance the membership of a country into the African Trade Insurance Agency.
“Once again Ghana is the forerunner and we truly see this as a role model approach for more countries to follow,” he stressed
Acting CEO of African Trade Insurance Agency John Lentaigne, said ATI and Ghana have been waiting for this day to finally announce that Ghana is a full member of the ATI. Effectively, this means that ATI is open for business in Ghana.
He thanked the German government, through KfW, for their invaluable support in pushing Ghana’s membership over the finish line. “As one of the largest and most dynamic economies in Africa, we see Ghana’s membership as a game changer” he stressed.
With ATI’s support, Ghana will now have access to previously scarce investment insurance, which will help to considerably lower the country’s borrowing costs as well as to attract new investors.