The Sunday News
Ngonidzashe Chiutsi Business Correspondent
ZIMBABWE companies exporting to African markets are doing so at a risk amid revelations that the Government has not paid about $100 000 insurance premium to a multilateral financial institution, African Trade Agency (ATI), to cover costs in case of a business risk, an official has said.
ATI is a financial institution providing export credit insurance, political risk insurance, investment insurance and other financial products to help reduce the business risks and costs of doing business in Africa.
In an interview last week Common Market for Eastern and Southern Africa senior trade officer Mr Tasara Muzorori said the failure by the country to pay the money was putting exporters at risk.
“Zimbabwe exporters exporting into Africa are not insured after the country did not pay the insurance fees to ATI. For a country to benefit from ATI, it has to pay $100 000 which goes into the pool so that they can claim compensation in the event that there is a risk. If a country does not pay, then it cannot be covered and the local firms cannot be covered under the ATI,” said Mr Muzorori.
“The advantage of joining ATI is that, it covers political and commercial risks,” said the official.
Mr Muzorori said he was not sure why the Government had failed to pay the money.
“I don’t know why the Zimbabwe is not paying that money, maybe it has other priorities,” he said.
He, however, said most of the African countries that had paid, got money from the World Bank.
“Most of the African countries that have paid got the money from World Bank at the point Zimbabwe was not eligible to get money from there,” said Mr Muzorori.
Export and policy analyst Mr Thomas Deve said failure by Zimbabwe to pay the money would affect the country’s ratings in doing business.
“The failure by the Government to conform to certain standards is not good and it’s a bad way of doing business. There are a lot of risks out there and businesses need to have genuine and maximum protection when they are doing business,” said Mr Deve.
He also said failure to pay the insurance cover also put companies at risk from unscrupulous foreign traders.
“These insurance products are important to protect business from unforeseen losses and when the Government fails to pay the premium it puts companies at risk,” said Mr Deve.
ATI was launched in 2001 with the financial and technical support of the World Bank and the backing of seven African countries as a multilateral organisation offering insurance, coinsurance, reinsurance and other instruments.
This comes after several African countries came together in 2001 to determine how best to enhance trade and attract more foreign direct investment into the continent.
Lack of credit guarantee schemes to support trade and a perception of high political risks in Africa were identified as key impediments to Africa’s economic growth.
