An insurance firm for political risks investments in Tanzania

TRADERS including politicians who are eager to invest their businesses in the country are assured of safety of their properties following an investment of over $ 1 billion by African Trade Insurance Agency (ATI) which guarantees lost properties due to political risks. It has been learnt. The risks are those caused due to political schemishes or change of country’s governing policies which ultimately cause damage of the properties invested for trade in the country, ATI’s Board Chairman Israel Kamozora said in an exclusive interview recently in Dar es Salaam. He said that, ATI is a unique insurance firm that undertakes to provide guarantees to protect development projects, contracts, investments and other business transactions against non-payment risks and risks that involve the government known as political risks in the country.  He says, the firm has facilitated its activities to risk individual’s business activities by compensating their customers’ insured properties for any disaster caused due to political crisis and terrorism in the country, added that the firm has been concentrating more in areas of energy and infrastructure sectors since 2009 when first incorporated in the country. According to him, the firm is among the 27 registered insurance firms currently operating in the country and was established with a view to mitigate any losses caused due to war or any other disasters such as terrorism. “This is not an ordinary insurance firm as it supports projects worth of millions of shillings, and thus it attracts foreign direct investments to stimulate foreign business in the country”, he said adding that, it also guarantees political insurance which protects foreign investors from getting bankrupt if there is a change of the government’s political policies.

A typical African home in a reserve area

Elaborating the efficiency of the firm, ATI’s General Manager Tanzania Chapter, Albert Rweyemamu says ATI works with banks in the country to provide extra security against payment defaults on their borrowers so that they might be in a position to issue as many loans as possible to Small and Medium Business Enterprises (SMEs). However, he noted that companies wishing to expand their businesses into markets outside of Tanzania use ATI to reduce the risks of non-payment from their new clients or buyers. ATI provides these companies the comfort of knowing they will be reimbursed if their clients is slow to pay or completely fails to pay. Tanzania is a founding member of the ATI, the Nairobi-based organization which was launched by nine COMESA countries in 2001. It had already established its projects before it pulled herself out of the jurisdiction of this common market for Eastern and Southern Africa trade movement. Initially these countries conducted a World Bank funded study to understand why they were attracting such low levels of direct foreign investment. The results showed that investors feared doing business in the region because of the perceived high levels of political risks. As a solution, the countries then joined a task force together to defend their resources to form ATI which has offices in Rwanda, Uganda, Zambia, Malawi, Tanzania and Kenya where it is headquartered to provide these unique brands of insurance to guarantees to investors into making them invest more in these countries. In Tanzania ATI collaborates in partnership with Tanzania Private Sector Foundation (TPSF), an organization that stands for the development of small and medium scaled business enterprises in the country.