Roundup: Global economic uncertainty threatens Africa's investment flows: officials

Global economic uncertainty is threatening foreign direct investment (FDI) flows to Africa, delegates attending a roundtable of Pan-African insurer Africa Trade Insurance Agency (ATI-A) said in Nairobi on Wednesday.

African ministers, investors and the private sector who kicked off a two-day meeting in Nairobi said with billions needed to fund priority infrastructure projects, the risk profile of these projects will come into sharper focus as countries vie for private sector financing.

Speaking during the opening ceremony, President of Benin Patrice Talon said public-private partnerships are a response to the structural needs of investors in African countries.

President Talon said such partnerships are necessary to break the persistent perception of the continent being high risk and Africa as a problem region.

"In this context, credit and investment insurance is the perfect defence to counter this challenge and to help propel the continent toward self-sustainability for the betterment of the African people," he said.

The roundtable is expected to provide a platform to support dialogue between governments and the private sector and also help to improve the bankability of African projects.

The meeting will also determine how best to tackle the investment and credit risk hurdles in order to make African risks bankable.

African Trade Insurance Agency (ATI) CEO George Otieno said Africa is in a period of realignment in this new global order and cautioned against betting against its resilience.

"We are still home to some of the fastest growing economies in the world -- as of 2017, the World Economic Forum ranks Côte d'Ivoire, Tanzania and Senegal on the list of the top ten fastest growing economies in the world," Otieno said.

"ATI offers the ideal solution precisely because the company has strong relationships with governments and because its risk assessments and mitigation solutions are seen as credible by global financiers and investors. With ATI involved in a transaction, governments are able to provide security to investors and suppliers against a range of investment risks," Otieno added.

In 2016, ATI insured close to 2 billion dollars worth of trade and investments and the company is increasingly supporting some of the continent's most important transactions such as Ethiopian Airline's fleet expansion and a 660-million-U.S. dollar investment in Lake Turkana, Africa's largest wind farm.

According to participants, for African governments, part of what is at stake are the much needed foreign direct investments and access to affordable financing necessary to spur development and, specifically, to close the estimated 900 billion U.S. dollars infrastructure gap.

Equally, they said the private sector stands to lose billions of dollars in lost opportunities if the requirements for a favourable investment environment are not adequately addressed.

During the boom years of the last two decades, Africa was experiencing unprecedented GDP growth rates but depressed commodity prices have seen growth in the sub-Saharan Africa region slow to 1.5 percent rate in 2016.

According to World Bank estimates, oil exporters account for most of the slowdown owing to their two-thirds contribution to regional output. Endit