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Adopt Common Approaches To Tackle Economic Challenges: Dr Bawumia Urges African Countries

Adopt Common Approaches To Tackle Economic Challenges: Dr Bawumia Urges African Countries

The Vice-President, Dr Mahamudu Bawumia, has urged African countries to adopt common regional and continental approaches to navigate the present global economic challenges.Such measures, he said, would help the continent exploit synergies to speed up their integration into the global economy.“Regional and economic integration will not only help our countries access the expanded regional markets within but also facilitate their global competitiveness,” added.Addressing the 22nd annual general meeting (AGM) of the African Trade Insurance (ATI) Agency in Accra yesterday[June 23, 2022], the Vice-President further said Africa needed to play increasing roles in the global market to maximise opportunities available in the interconnected world economy.In that regard, he said, the intervention of the ATI, a member of the African Development Bank (AfDB), became important in complementing the efforts of governments to sustain growth and navigate economic shocks.The ATI was founded in 2001 by African states to cover the trade and investment risks of companies doing business on the African continent.

It basically provides political risk, credit insurance and surety insurance.CollaborationDr Bawumia also called for closer cooperation between the AfCFTA Secretariat and the ATI to speed up the implementation of the free trade area.He said if Africa worked together in that direction, “we will gain more time and mileage in reducing reliance on external markets and enhance value addition of our resources for our socio-economic development”.The Vice-President pledged the country’s continued support to the ATI because “we believe in its mission of transforming the continent into a prime trade and investment destination”.He said when the ATI was set up in 2002, it recognised that the best way to address the international financial market’s perception of Africa as a high-risk environment was to set up a credible insurance mechanism to mitigate losses caused by political events.“It was collectively agreed that governments of our member countries will be the ultimate risk-takers in the insurance mechanism implemented by the ATI,” he said, and, therefore, urged member countries of the agency to honour their commitments to the ATI.

“The ATI is African, it is for Africa and a multilateral financial institution established to address challenges to Africa’s trade transactions,” he added.Financial resultsGiving an overview of the ATI’s activities last year, the Chief Executive Officer (CEO) of the agency, Manuel Moses, said “our financial results for 2021 reflect a sustainable year improvement in our financial indicators, despite the profound effect of the COVID-19 pandemic that impacted all businesses and countries globally”.He said underwriting revenues registered a growth of 14 per cent or $143 million over the previous year, adding that the agency’s underwriting profit also increased by 11 per cent from $29 million to $33 million in 2021. “Our gross exposures, which reflect the absolute contract values of the insurance covers that we have provided, also increased from $6.3 billion to $6.6 billion as of the end of December 2021,” the CEO said.According to Mr Moses, the Russia-Ukraine war posed a significant threat to the ATI and businesses across the world, saying: “We stand ready to safeguard our capital to ensure that our financial performance is not adversely impacted.”ChallengesThe Minister of Finance, Ken Ofori-Atta, said the global pandemic, security challenges, tightening global monitoring conditions and climate-related shocks which threatened to derail the collective progress of Africa’s economic sovereignty were top on the agenda of policy makers.He called on pan-African institutions and private sector partners to buy into the renewed vision of reducing the continent’s overdependence on the rest of the world and shift from ambition to vision.By increasing access to and lowering the cost of financing for governments and investors in Africa, he said, the ATI could be more responsive to the strategic reforms of member states. 

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