Etihad Credit Insurance (ECI) and the African Trade Insurance Agency (ATI) have agreed to work together to improve trade links between the UAE and Africa by offering trade financing options to companies and exporters in both countries.
To that end, the two sides signed a Memorandum of Understanding aimed at improving exporters' global competitiveness by raising their awareness of trade solutions and risk-mitigation tools for economic and political threats. Massimo Falcioni, CEO of ECI, and Manuel Moses, CEO of ATI, signed the MoU. The Memorandum of Understanding would enable the two organisations to work together to expand their respective insurance and financing capacities.
Exporters in a range of sectors, including metals, cars, steel, and titanium, agricultural, shipping, green energy, mechanical, chemicals, and waste management, can benefit from this cooperation through conferences, seminars, B2B gatherings, and activities coordinated jointly by ECI and ATI.
"As we celebrate the rich and illustrious trading ties of the UAE and the African region over the years, we at ECI are delighted to take this relationship forward with ATI. With state-backed guarantees and protections against economic and political risks, this partnership would give our exporters the courage to enter the African region's diverse markets and capital," Falcioni said, emphasizing the significance of the strategic alliance.
Moses said, "We are excited about the potential to enhance our relationship with ECI by pursuing mutual insurance, reinsurance, co-insurance, and skill growth opportunities, as well as assisting and promoting ATI and ECI insureds. The signing of this agreement is also timely because ATI has a strong agenda that supports regional trade and private sector development, especially in the aftermath of the coronavirus, which has wreaked havoc on global economies."
According to Falcioni, Africa provides a range of trading opportunities for UAE firms. Non-oil trade between the UAE and Africa reached $40.7 billion in the first nine months of 2020, up from $36.9 billion in the same timeframe in 2019, while non-oil trade between the two reached $50 billion in 2019, up from $33 billion in 2015.
ECI assists UAE companies by providing trade risk reduction mechanisms that reduce volatility in a market where open credit account transactions are the most common and risky payment choice. In the unlikely case of a non-payment — when the client is unwilling or unable to pay — insurers would compensate the cost, meaning that the company receives payment.
The African Trade Insurance Agency was founded in 2001 as a part of an effort by African countries under the Agreement Creating the African Trade Insurance Agency (the "ATI Treaty"), In order to promote and stimulate exchange and investment in the African region, ATI promotes private-sector-led trade transactions, investment, and profitable activities by providing political risk and credit risk protection, coinsurance and reinsurance, financial instruments, and related services.