While there is no immediate end in sight to the current global crisis, exacerbated by the Russian-Ukraine war, Vice President Dr. Mahamudu Bawumia has said the disruption caused to the supply chain of traded commodities will likely result in the emergence of a new global architecture.
The current happenings, he said, threaten to roll back the economic gains of Africa, “with the continent’s real GDP expected to decelerate to 4.1 percent from 7.1 percent, according to the AfDB’s economic outlook”.
The pandemic and conflict have disrupted the supply chain of traded commodities, including fertiliser which is sourced mainly from Russia – causing prices of oil and commodities to increase.
He observed that the situation has resulted in rising fuel prices, with the construction sector also facing challenges related to the imports of iron ore and steel from Ukraine which account for over 60 percent of Ghana’s total imports from the country.
Ghana, on the other hand, has equally been unable to export manganese to Ukraine due to the war.
It is given these incessant global crises, he noted, that Africa must reduce its vulnerability to external shocks while readying itself for the emergence of a new global architecture.
“Africa needs to not only create and sustain conditions that are conducive to increased trade and investments, but we also need to remove structural impediments which stand in the way of private enterprises to pave the way for higher and more sustainable economic growth over the long-term,” he stated.
Dr. Bawumia was speaking at the 22nd Annual General Meeting of Shareholders and 9th Investor Roundtable of the African Trade Insurance Agency (ATI), and recognised that ATI has a critical role to play.
“The African Trade Insurance Agency’s (ATI) role in helping to mitigate adverse effects of the pandemic and conflict is equally critical.”
ATI, he said, has remained committed to this course 20 years after its establishment, and continues to facilitate increased volumes of trade and investments by providing innovative de-risking tools aimed at maintaining capital flows across Africa at this critical time in our history.
Meanwhile, he noted that government is putting in place initiatives that accelerate economic transformation to enable the country recover from the economic shocks and return to a growth path.
Furthermore, given the relatively small size of the African economies, Dr. Bawumia said there is a strong case for adopting common regional and continent-wide approaches to navigating present challenges.
Additionally, he noted that this will not only help create access to expanded regional markets, but also facilitate global competitiveness.
The Nairobi-headquartered pan-African multilateral insurer has been playing an important role in supporting Africa to position itself in a better place to take advantage of the economic recovery.
This is done essentially by facilitating trade and investment finance to support economic activities and mitigate political and commercial risks associated with trade and investments in Africa.
In 2021, ATI insured a total portfolio of trade and investments across Africa valued, at US$6.6billion, and since its inception it has supported over US$71billion worth of investments and trade across the continent.
The CEO of ATI, Mr. Manuel Moses, speaking at the event said ATI has shown great resilience and achieved growth in both its top-line and bottom-line positions as summarised in its FY2021 Financial Indicators.
It recorded gross underwriting revenues of US$143.5million, up 14 percent compared to the previous year; while underwriting profitability increased by 11 percent from US$29.8million the previous year to US$33million in 2021.
Gross Exposures also increased from US$6.3billion as of the end of December 2020 to US$6.6billion as of 31 December 2021. However, Net Exposure and Net Investment Income declined by 4 percent and 37 percent respectively.
This was attributed to ATI’s risk management and declining yields in its international investment portfolio – but 26 percent equity growth was recorded as ATI welcomed Cameroon and Senegal as shareholders.