Africa’s Trade Risk Guarantor Eyes Bigger Balance Sheet Amid Global Shock

Mintesinot Nigussie

The African Trade and Investment Development Insurance (ATIDI) is planning to expand its balance sheet as rising geopolitical tensions and higher import costs increase demand for trade guarantees across member states.

The multilateral insurer is seeking about 500 million US dollars in additional capital from partners to strengthen its lending capacity and support countries facing elevated financing pressures.

Chief executive Manuel Moses said the push has become more urgent following renewed instability in the Middle East after US and Israeli airstrikes on Iran in February, which have contributed to volatility in global energy markets and added to inflationary pressures affecting trade flows.

“Demand is coming faster than we can absorb with our current balance sheet,” Moses said. “Given what is happening now, we probably need to take that to about 1.5 billion US dollars.”

Alongside the planned capital increase, the institution is also considering the creation of a separate emergency financing facility of around 1 billion US dollars designed to allow faster response to future shocks affecting trade and investment.

ATIDI said each dollar of capital has historically supported about 10 dollars in trade and investment, with roughly 93 billion US dollars mobilised since 2001 and an annual average of about 10 billion US dollars over the past five years.

Overall, ATIDI’s plan to expand its balance sheet reflects the growing need for trade risk insurance amid global shocks and highlights the institution’s critical role in supporting African trade and investment.