Emmanuel amoabeng Gyebi 2022-06-25 6 Valid views
The African Trade Insurance Agency (ATI) is optimistic that Ghana would be able to receive credit at commercial rates comparable to industrialised countries through the group's insurance cooperation. This would help Ghana speed up its development.
The action, in accordance with the ATI, will result in improved financing conditions and longer loan terms, as well as assist the nation pay off more expensive debts and establish a more sustainable debt management procedure.
"More generally, other economic sectors will also profit. Banks in particular stand to gain in the financial services industry since ATI's presence will assist to enhance banks' access to credit insurance, according to a statement from the company.
According to the association, the insurance will augment the collateral that banks largely rely on in order to lend to Small and Medium-sized Businesses. "These SMEs make up the majority of companies globally and play a significant role in the growth of the global economy and the creation of jobs. As a result of ATI, Ghanaian banks may now have access to new, better sources of income, which would assist the country's economy expand. The manufacturing and commerce sectors also profit from ATI's credit insurance since it enables them to increase their exports and imports of necessary items that can help them grow their businesses.
The statement claims that the relationship with ATI, which will be accomplished through ATI's Regional Liquidity Support Facility (RLSF), supported by KfW Development Bank and NORAD, would also benefit the Energy Sector.
"Ghana can aid in reducing the harmful effects of climate change. The Facility was established to encourage renewable energy initiatives in ATI member nations in an effort to combat climate change. By defending the project developers from the possibility of late payments from public off-takers, RLSF promotes small and mid-sized renewable energy projects. This makes sure that more renewable energy projects are able to secure financing, allowing the Ghanaian government to develop a cleaner energy mix to aid in the fight against climate change. Once Ghana ratifies the RLSF Memorandum of Understanding, which is anticipated to take place during the course of the next year, the Facility will be accessible.
The ATI hopes to improve risk perception, reduce hazards for investors and traders, and direct money to the sectors of the economy that are most sustainable.
The ATI, which began in 2001 as an insurer of political risk for Africa, initially concentrated primarily on the need of international investors to hedging political risks related to probable governmental acts or inactions.
"ATI quickly came to the conclusion that addressing the issues surrounding the cost of financing and the amount of alternative private money ready to conduct business on the continent presented a significant opportunity. ATI is now a highly sought-after partner. As a consequence, the pan-African multilateral insurer keeps closing the gap in offers between creditors and suppliers and sovereigns and investors, the statement stated.
The organisation believes that there is rising acknowledgment of sustainability in the sovereign area and the necessity for all partners to engage in-depth conversations on the priority of transactions.
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