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African Countries Urged to Use Insurance Agency for Trade Promotion
Malaysian Prime Minister Mahathir Mohamad Monday urged African countries to take advantage of a newly-launched regional insurance agency to promote trade for the continent.
"In order to top hedge over the future of trade investment whose premiums are very high, more African countries should join and thus will bring down the premium costs," said Mahathir, who is attending the four-day Global 2001 SMART Partnership Dialogue which was opened on August 18.
The Malaysian prime minister made the remarks while launching the Africa Trade Insurance Agency (ATIA), a regional institution providing insurance against political risks that scare off potential foreign investors in the most parts of Africa.
"Let us exploit the provisions of WTO (World Trade Organization) in general and other market access opportunities under AGOA (
Africa Growth Opportunities Act) to further African interests," Mahathir said.
Addressing the launching ceremony, Kenyan President Daniel arap Moi, whose government has offered to house the agency's headquarters secretariat, warned member states of dormant participation, saying: "Members states in the ATIA should be practical and endeavor to develop and support it as per their commitments. The moment members turn dormant then they will be outsmarted."
Moi told his audience that ATIA creates some advantages that include economies of scale, marketing initiatives and development of specialized skills.
At the same function, Nicolas Biwot, chairman of the ATIA General Assembly and Kenyan Minister of Trade and Industry, said that part of the initiative would provide for active participation and integration in the global economy.
"The facility will further facilitate access to and improve the terms of trade and finance, while providing an enabling environment for investment in Africa," said Biwot.
The ATIA commenced with a thin membership of seven central African states that include Burundi, Kenya, Malawi, Rwanda, Uganda, Zambia, and Tanzania.
The institution is a culmination of a Common Market for Eastern and Southern Africa (COMESA) initiative, dubbed as African Guarantee Facility and later Regional Trade Facilitation Project ( RTFP).
Its purpose is to put in place a mechanism that will mitigate the political risk for ensuring payment for both imports and exports in and out of the participating countries.
The ATIA, a World Bank funded facility under International Development Aid (IDA), has a projected potential of promoting trade transactions in Africa, generating an estimate of 800 million dollars over five years and up to 5 billion dollars over 10 years.
The ongoing Global 2001 SMART Partnership Dialogue, which has drawn over half a dozen presidents and prime ministers and some 900 participants from 23 countries, aims to bring together government and private sectors to enhance business and investment in the developing world through smart and forward looking partnership.
The SMART partnership stands for Sustainable, Measurable, Achievable, Realistic and Timely partnership.
The first SMART partnership dialogue took place in Langkawi, Malaysia in November 2000.
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