South Sudan has this month realised a record $27.62 million in commercial risk insurance cover through the efforts of the South Sudan government, the African Development Bank (AfDB) and the Africa Trade Insurance Agency (ATI).
ATI has, to date, provided gross risk cover to facilitate investments in the electricity, gas, water supply and financial and insurance sectors.
South Sudan is also expected to benefit from a $100 million trade facility from the Trade and Development Bank (TDB). The facility will focus on strategic commodities, budgetary support and other essential co-imports. It will comprise $60 million in hard currency and $40 million for spare parts, food, pharmaceuticals and refined products. About $5 million has been ring-fenced for solar energy at rural clinics and police stations.
South Sudan’s membership of the ATI and the TDB was made possible by a $18.15 million concessionary facility from the African Development Bank.
The African Development Bank’s country manager for South Sudan, Benedict Kanu, commented: “With very weak capitalisation of private trade finance and insurance institutions in South Sudan, there is a pressing need to boost trade finance. This groundbreaking ADB-supported project demonstrates an innovative use of limited concessionary financing, with exemplary catalytic effects in the immediate and long-term. Once scaled up, the project will address some of the over-arching factors contributing to economic fragility in South Sudan, particularly financial sector development and risk management.”
Kanu added: “The immediate and future benefits of South Sudan’s ATI and TDB membership project recall the country’s aspirations of membership of the East Africa Community (EAC) which were realised in April 2016. They also reinforce the Bank’s High 5 Agenda for Africa’s economic transformation”.
The Bank’s Head of Trade Finance, Yaw Adu Kuffour, said, “the shortage of trade finance in Africa presents clear risks to the economic performance of our regional member countries, especially those in transition. We are glad to support South Sudan in this way”.
The African Development Bank will work closer with ATI, the government, the private sector and other concerned stakeholders to promote inclusivity and communication and information dissemination at the country level, especially on ATI’s services, products and investment guarantee tools. In collaboration with ATI and TDB, the Bank will also organise a stakeholder engagement event in Juba at a date to be determined.
Source: Company Press Release