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ZIMBABWE could secure insurance cover of up to $500 million on goods that it wants to trade by paying $15 million to join the African Trade Insurance (ATI), a senior African Development Bank (AfDB) official said on Monday.The government is negotiating with the AfDB and the private sector to raise funding to join the agency. The ATI is a multilateral financial institution set up to provide export credit insurance, political risk insurance, investment insurance and other financial products to assist in reducing the business risks and costs of doing business in Africa.

It also facilitates exports, foreign direct investment into and trade flows within the continent. AfDB resident representative Mateus Magala said Zimbabwe had potential to trade more goods  but was being hindered by perceived country  risks.

“We’re actually working on a programme to try and see if we can help the country (Zimbabwe) to become a member of the African Trade Insurance Agency to have cover for political and commercial risk because by providing about $15 million of membership fee, Zimbabwe could protect its trade up to half a billion dollars for trade insurance,” he said.

Magala was addressing the one day Business Council of Southern Africa conference at a local hotel. The conference was running under the theme:

“Positioning the private sector in industrial development, beneficiation and value addition to natural resources.”

Zimbabwe was accepted to join the pan-African body in 2012 but the country can only start enjoying the benefits after making a contribution in  capital.

ATI was launched in 2001 with the financial and technical support of the World Bank and the backing of seven African countries. Some of the members of the organisation include Burundi, Democratic Republic of Congo, Madagascar, Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.

In less than a decade, it has supported over $2,5 billion worth of trade and investments across the continent. Sovereign governments buy shareholding in ATI and that money is used as collateral, meaning when a country reneges on a commitment, the concerned investor would be compensated with that country’s portion of capital in ATI. – New Ziana.