WORLD BANK Regional Trade Facilitation Project for Africa (RTFP) A COMESA-WORLD BANK PROJECT

WORLD BANK Regional Trade Facilitation Project for Africa (RTFP) Provides political risk insurance for cross- border trade Administered by the African Trade Insurance Agency (ATI)

WORLD BANK Regional Trade Facilitation Project for Africa Membership in ATI and participation in the project is: OPEN TO ALL AFRICAN COUNTRIES

WORLD BANK Regional Trade Facilitation Project for Africa Which Government Performance Risks are covered?  expropriation  interference in the management or operations of an enterprise causing non payment  imposition of exchange controls  foreign exchange shortages  retrospective imposition of import or export taxes  confiscation of goods  withdrawal of import or export licenses  transit risk –

WORLD BANK Regional Trade Facilitation Project for Africa Which non-Government Performance Risks are covered?  War  Civil disturbance  Civil commotion  Embargoes

WORLD BANK Regional Trade Facilitation Project for Africa Who is covered? –Foreigners engaged in trade transactions in a participating country, against political risks in that country –Exporters of goods and services in participating countries, against political risks in the buyers’ country

WORLD BANK Regional Trade Facilitation Project for Africa What types of transactions are covered? ANY TYPE OF TRANSACTION THAT LEADS TO A PRODUCTIVE ACTIVITY, other than equity investment

WORLD BANK Regional Trade Facilitation Project for Africa How is the project structured? –Participating countries borrow from the World Bank –Control of funds ceded to ATI –ATI operates in partnership with private insurers –Insurance policies are issued by the private insurers –Private insurers are given exclusive access to WB funds –Private insurers leverage WB funds –Premium sharing formula recognises “first loss” arrangements

WORLD BANK Regional Trade Facilitation Project for Africa What are the project’s key design aspects? –Single country schemes –“First come-first served” principle –Uniform premiums –Strong and standardized disciplines –Appointment of Ombudsman

WORLD BANK Regional Trade Facilitation Project for Africa What are the benefits of a regional approach? THE MORE COUNTRIES PARTICIPATE, THE MORE POWERFUL AND EFFECTIVE THE PROJECT WILL BE

WORLD BANK Regional Trade Facilitation Project for Africa What is the African Trade Insurance Agency? NEW MULTILATERAL AGENCY UNDER SECTION 102 OF THE UN CHARTER

WORLD BANK Regional Trade Facilitation Project for Africa Catalyzing trade credit insurance in Africa MAJOR CREDIT INSURERS HAVE EXPRESSED INTEREST IN ENTERING THE AFRICAN MARKET IF POLITICAL RISK COVER IS AVAILABLE