Nippon Export and Investment Insurance (Nexi), the Japanese export credit agency (ECA), has made a US$14.8mn equity investment into the African Trade Insurance Agency (ATI), as the Asian country aims to strengthen its presence in the continent.
ATI is a pan-African institution that provides political risk insurance to companies, investors and lenders interested in doing business in the region. Among its shareholders are 21 member countries, and institutional backers including global insurer Chubb, India’s Export Credit Guarantee Corporation and UK Export Finance. With the investment, Nexi becomes the multilateral credit insurer’s 13th institutional shareholder.
The development builds on a strategic partnership signed between Nexi and ATI in 2019, which saw the launch of a Japan desk in ATI’s Nairobi office to provide Japanese companies with risk mitigation solutions for African projects. To date, ATI says the Japan desk has supported both Japanese and African business with an active gross exposure valued at US$1.1bn in the information and communication, financial and insurance, and construction sectors in Côte d’Ivoire, Egypt, Ethiopia and Nigeria.
Most recently, the Japan desk provided a 10-year foreign direct investment risk insurance cover to Japan’s Sumitomo Corporation for its investment in a new telecommunications company, where Nexi provided reinsurance support to ATI.
ATI says it now expects to support “many more” Japanese manufacturers, traders, exporters and financial institutions seeking market access across Africa in the coming years.
“We are confident that as Japan expands its FDI and footprint into Africa, its membership in ATI will not only improve our institution’s capacity to support trade and investment across the continent, but will also attract more Japanese investment seeking business opportunities in Africa’s 1.2 billion-strong single market under the African Continental Free Trade Area,” says ATI chief executive Manuel Moses.
Nexi’s investment into ATI comes amid a push by Japan’s government to regain lost ground in the region. According to the African Development Bank, Japan’s foreign direct investment in the region declined from US$12bn in 2013 to just US$6bn in 2021, while bilateral trade with Africa amounts to just US$23.5bn, or 1.5% of Japan’s total trade.
During the Tokyo International Conference on African Development in August last year, the Japanese government pledged to invest US$30bn over the next three years, saying Japan aspires to be “a partner growing together with Africa”.
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