Demystifying Development Insurance: ATIDI Explains Role in Mitigating Risks and Driving Africa’s Growth

By TOP AFRICA NEWS Media

4th February2025: In a pivotal virtual press conference hosted by ATIDI on February4,2025, industry experts at the forefront of development insurance shed light on critical issues impacting Africa’s investment landscape.

With a theme centered on “Demystifying Development Insurance: Trends, Insights, and Impact on Africa’s Growth,” the session featured the leadership of the African Trade and Investment Development Insurance (ATIDI), including Manuel Moses, Chief Executive Officer; Benjamin Mugisha, Chief Underwriting Officer; and Dr. Anthony Ehimare, Chief Risk Officer.

The event comes at a time when Africa is both reaping the rewards of its immense economic potential and grappling with challenges such as corruption, security concerns, and diverse political landscapes.

TOP AFRICA NEWS engaged the panel with questions addressing these issues, sparking candid discussions on how ATIDI is working to foster confidence among global investors while driving sustainable development across the continent.

Tackling Corruption and Security Challenges to Attract Foreign Direct Investment

Addressing a query on how ATIDI mitigates the dual challenges of security issues and corruption—which deter foreign investment in many African nations—Benjamin Mugisha elaborated on the organization’s rigorous due diligence approach:”When it comes to due diligence, we look for alignment with best practices in procurement, environmental, social and governance (ESG) standards, anti-money laundering protocols, and other critical areas that help attract Foreign Direct Investment (FDI). For the transactions we support, we conduct not only comprehensive reviews of provided documentation but also independent assessments,” Mugisha stated.

While acknowledging that challenges such as corruption and security risks persist, Mugisha emphasized that ATIDI’s engagements create a ripple effect of best practices among stakeholders.”For the deals we support—such as infrastructure projects—the value we bring in terms of pricing and ensuring credible, high-quality partners proves that adopting best practices yields tangible benefits. This helps encourage governments to adopt favorable policies and benefit from our backing and that of other international partners,” he added.

However, Mugisha noted limitations, pointing out that as a Development Finance Institution (DFI), there are sectors and activities—such as military operations or high-risk industries like diamond trading—that ATIDI cannot currently support due to insufficient policy frameworks.

He emphasized their focus on youth empowerment as a pivotal factor in countering extremism. He noted ATIDI’s recent interventions in the Sahel region, where the organization supported initiatives to increase literacy and improve access to education, thereby reducing the attractiveness of extremist recruitment among youth

“In one of the countries we supported in West Africa, we demonstrated how addressing poverty and creating job opportunities can enhance security,” Mugisha explained.

“When young people have opportunities, the likelihood of them being drawn to negative elements diminishes. By facilitating job creation and supporting essential services, we contribute to economic development and foster peace.”

 Innovating Insurance Solutions for Africa’s Diverse Risks

Africa’s political and economic diversity requires tailored solutions to address the unique risks of high-risk, high-reward markets.

Mugisha stressed the importance of contextualizing these risks, drawing attention to misconceptions stemming from localized incidents.”People often refer to Africa as a single entity, but the continent is made up of several countries. Similarly, within countries, risks are often localized. Unfortunately, the perception is that an isolated incident means the whole country is unstable, and that’s not the case,” he explained.

ATIDI is focused on developing customized insurance products to address these specific challenges. By leveraging deep market insights and working closely with stakeholders, the institution aims to empower investors to make informed decisions, overcoming the generalizations that often cloud Africa’s investment narrative.

Enhancing Governance and Regulatory Reform

On the question of regulatory reforms, Mugisha highlighted the disparity between African markets and international counterparts in utilizing development insurance products. While some African regulators, such as those in Rwanda, have embraced ATIDI’s solutions to mobilize capital for local banks and private sectors, he cited a need for a broader continental push to enhance engagement with central banks and other regulators

“Rwanda is a shining example of how regulatory authorities can work with us to create an enabling environment for private sector growth,” Mugisha said, crediting the Central Bank of Rwanda for its willingness to recognize ATIDI’s products as key instruments for economic development.

“However, we call on other countries and central banks across the continent to follow suit and seize the opportunity to capitalize on our solutions.”

In a broader approach to public-private partnerships (PPPs), Mugisha also underlined ATIDI’s policy work in sectors such as energy, transportation, and infrastructure. He referenced the role of private companies in transforming energy generation across Africa and advocated for similar models to be extended to transmission and distribution, as well as other sectors like railways and road infrastructure. “We work closely with PPP units in various countries to mobilize private investments and align policy frameworks to catalyze growth,” he added

Manuel Moses, ATIDI’s CEO, further reinforced these points while praising Rwanda’s leadership in leveraging ATIDI’s offerings.

“At least we can acknowledge Rwanda as a role model. Authorities there have embraced our products to foster economic development,” Moses said.

He expressed hope that other African nations would take similar steps, emphasizing the importance of combating corruption to create a conducive environment for prosperity.

“Fighting corruption matters because it enables us to collaborate with credible partners, ensuring resources are channeled effectively into productive sectors.”

Dr. Anthony Ehimare, ATIDI’s Chief Risk Officer, echoed the call for strengthened governance and transparency across African nations. He emphasized the link between sound policy frameworks and the ability to mitigate risks, drive investments, and create sustainable development opportunities

ATIDI’s insights at the press conference underscore the pivotal role of development insurance in addressing Africa’s investment challenges. By fostering youth employment, advancing regulatory reforms, and enabling public-private partnerships, ATIDI aims to create a more robust investment ecosystem across the continent, with Rwanda emerging as a standout market for innovation and leadership

ATIDI’s Role as a Driving Force for Africa’s Growth

As Africa positions itself as a global investment hotspot, institutions like ATIDI play a pivotal role in addressing the continent’s challenges while unlocking opportunities for growth. By fostering confidence among investors through robust due diligence, tailored insurance solutions, and advocacy for better governance, ATIDI continues to support Africa’s aspirations as a hub for inclusive and sustainable development.

For investors looking to navigate Africa’s diverse and dynamic landscape, the insights shared during the virtual press conference reinforce the critical importance of engaging experienced partners like ATIDI, whose expertise balances risk with reward for long-term success.