THE President of the African Export-Import Bank (AFREXIMBANK), Dr. Benedict Oramah, has challenged insurance companies in Africa to come out from their comfort zones and play in the global space to mitigate the emerging risks to trade and economic development.
In his keynote address on the occasion of the 20th anniversary of Mutual Benefits Assurance Plc in Lagos, said we are of the view that it is time these companies emerge from their comfort zones to take up the opportunities that are being presented by the developments in the global and African markets.
Oramah, who was represented by Chief Economist and Director of Research, Dr. Hippolyte Fofack, said “African insurance companies should begin developing innovative products that address specific needs of the continent. They should: Begin providing credit insurance to African banks and other financial institutions to enable them extend medium to long-term credit to African entities engaged in trade and trade projects. This is an important means to also ensuring improved access to credit by small and medium scale enterprises, who – as we all know – are the engine of growth of the continent; develop political risk insurance to attract foreign investments into the national economies; design health and medical insurance products that covers persons who are affected by outbreak of pandemics.”
He said, Afreximbank was created to deal with such challenges. “Our instruments of intervention are built to deal with the challenges imposed by market conditions and to create enabling environment for our partners to take up opportunities in the continent”.
According to him, special facilities that are available to contend with some of the issues discussed are highlighted hereunder: ECA loan facilitation programme, through which the bank partners with ECAs in both advanced and developing countries, including China Exim Bank, India Exim bank and Exim banks in Brazil and Turkey, to facilitate the acquisition of investment goods into Africa.
It has also created and deployed instruments that mitigate the perceived risks that are seen to be emerging. For instance, he said, the bank’s country risk guarantee facility now has wider country and risk coverage; the bank is aggressively promoting factoring as an instrument of choice in dealing with new markets and non-commodities trade; Africorrbanking has been introduced to enable Afreximbank share partially or fully the credit risk of African banks opening letters of credit to be confirmed by an international bank.
He explained that in recognition of the existing challenges to financing intra-African trade,
Afreximbank designed a new programme in 2011, called Intra African Trade Facilitation Programme (INTRAFAP) to provide a platform for mobilizing financial, technical and other resources for the development, promotion and financing of intra-African trade.
Besides, he said, the bank is beginning to advance the idea of mobilizing African resources to promote trade and economic development in the continent. In this regard, it has created the Central Bank Deposit Programme (CENDERP) through which it mobilizes parts of the reserves of African central banks to finance their exports to other African countries.
Group Managing Director, Akin Ogunbiyi, in his remarks said in May, this year in Tunis, Tunisia, Mutual Benefits Assurance Plc most deservedly achieved a first in the history of Insurance in Nigeria by being adjudged the Most innovative insurance company in Africa, in a keenly contested award ceremony sponsored by African Reinsurance Corporation (Africa Re).
We in Mutual Benefits have demystified the myth that this potentially huge business of spreading risks in order to promote substantial investments in the productive sector, cannot thrive in the “informal” sector even better than it is doing in the “formal” sector.
MUTUAL’s entrepreneurial initiative of growing the insurance business has made us a leader in Nigeria as well as the entire African continent, all thanks to my colleagues in the MUTUAL family; hardworking and dedicated crew members.
He said, “if Mutual our dear company, could have grown this big in spite of “battles” of different types and dimensions, one can imagine if there were concerted efforts to support our pioneering entrepreneurial initiatives”.
It is worthy of note that with a little premium, insurance gives confidence that guarantees personal well-being and comfort as well as investments that engender the much desired development and growth.
For instance, he said, several years ago, the textile industry in the United States of America suffered a severe setback because of frequent fire outbreaks in textile mills. The insurance industry in the US with its ingenuity intervention