By John Sambo
KIGALI, RWANDA – Rwanda’s economy continues to impress with annual real GDP growth rates averaging 8% for over a decade.
The African Trade Insurance Agency (ATI) has played a role in this success by supporting trade and investments.
Officiating at the 16th Annual General Meeting in Kigali, Prime Minister Anastase Murekezi noted: “ATI credit investment and insurance products extended to Rwandan companies have made, and are still making an important impact to support Rwanda to achieve its 2020 Vision, focussing on transforming our Country into a middle income nation in which Rwandans are healthier, better educated and generally more prosperous”.
Announcing the company’s 2015 results, ATI urged banks to take advantage of its products to help more local companies access critical financing and credit facilities. ATI noted a US$ 1.7 billion (Frw 1.3 trillion) volume of untapped business in its pipeline for Rwanda.
In 2015, rapid infrastructure development fuelled ATI’s performance in Rwanda. In a press briefing held during the AGM events, Minister of Finance and Economic Planning, ClaverGatete, added “There is a lot of potential for ATI to make a difference in other areas of Rwanda’s economy such as agricultural exports, where its products could help companies safely expand into new markets.”
In addition to its corporate mandate to maintain profitability, ATI also has a developmental mandate aimed at helping member countries achieve sustainable economic development. Banks are the natural conduit for helping ATI realise both mandates by financing small and medium-sized (SMEs) companies in local markets. SMEs represent up to 80% of the economies of most African countries but banks are often hesitant to lend to them because they lack the necessary collateral to cover their loans. With ATI’s support, banks are able to.
“In the past year, our business in Rwanda has nearly tripled to over US$ 110 million in current exposure. But this has mainly been on the investment side. We want companies in Rwanda to take advantage of our trade products as well protect their balance sheet against payment default risks, allowing them to lend more to this vital sector,” George Otieno, ATI’s Chief Executive said.
ATI’s 2015 results show a five year growth trend. The company posted a record US$ 4.7 million (3.7 billion francs) profit, an increase of 36% over 2014. In this period, ATI also doubled its business portfolio from US$10 to US$23 million (Frw 7.8 to Frw 18 billion). Alongside growth, ATI also increased claims payments, disbursing a record US$8.7 million (Frw 6.8 billion), a 34% increase.
Rwanda is a founding member of the institution with US$8.7 million (Frw 6.8 billion) in share capital of which ATI has leveraged nearly 50 times to insure transactions worth over $425 million (Frw 332 billion) into the country over the last seven years.
ATI was established in 2001 to help African States to attract investments and facilitate trade on the Continent. To date, ATI’s current portfolio of insured business, representing trade and investment transactions that are ongoing.