Ministers responsible for ECOWAS affairs in Member States have approved the establishment of a regional Investment Guarantee Agency with an authorized capital of US$1 billion to help mitigate political risks associated with investments in West Africa.
Specifically, the Agency will provide political risk insurance, export trade guarantee services and Re-insurance services to local insurance companies.
The establishment of the Agency in partnership with the African Trade Insurance (ATI) was one of the decisions taken by the 71st session of the ECOWAS Council of Ministers, which ended on 17th December 2013 in Abidjan, Cote d’Ivoire’s economic capital.
This was in response to the request by the region’s ministers of finance following a meeting of their experts. The ministerial meeting considered the report of a 2012 study commissioned by EU-BizClim on behalf of the Community.
The study presented the economic and financial justification for the establishment of the agency, with a detailed investment and operational budget over a 10-year period and the initial financial structure and funding.
The establishment of the agency, to be facilitated by Member States and modelled after the ATI, would help insulate Foreign Direct Investors from associated risks thereby encouraging investments in large and complex high impact sectors. It will also facilitate access to finance and reduce risk premium and stimulate exports from the region as well as intra-community trade.
Council also endorsed a recommendation by the ministers of finance for an implementation Committee comprising representatives of Nigeria, Cote d’Ivoire, ECOWAS Commission, ECOWAS Bank for Investment and Development, West Africa Insurance Companies Association (WAICA) and ATI, to commence procedures for effective partnership between ECOWAS and the ATI.
The establishment of the Agency is part of a programme by the Commission to make the region more attractive as an investment destination.