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Farirai Machivenyika Senior Reporter
The National Assembly yesterday ratified the African Trade Insurance Treaty (ATI) that is set to unlock up to $1 billion in funding to the country. The motion for the ratification of the treaty was moved by Deputy Minister of Industry and Commerce Chiratidzo Mabuwa.
“We are going to attract investment, create jobs and alleviate the plight of our people,” Deputy Minister Mabuwa said. She said the country would derive many benefits from ratifying the law including boosting investor confidence from any perceived risk the country might have.
“It is supposed to cover the political and trade risk a country might have. Under political risk issues like political violence, civil disturbances, terrorism and sabotage are covered. The political risk is that an investor’s returns could suffer as a result of political risk and to that end if we are insured the investors will be able to allay their fears whether it happens, perceived or otherwise.
“They will be able to recoup the returns on their investment from this insurance,” she said.
Deputy Minister Mabuwa also told the House that the African Development Bank had provided $5 million while the Reserve Bank of Zimbabwe and local financial institutions had mobilised $10 million to enable Zimbabwe to buy its shares to be a full member of the ATI.
Contributing to the debate, Buhera West representative Cde Oliver Mandipaka said it was important for Zimbabwe to ratify the treaty as it would create opportunities to access much need capital.
“This will provide an opportunity to access funding for infrastructure development which is what we need in line with the Zim-Asset objectives,” he said.
Mazowe South representative Cde Fortune Chasi said Zimbabwean companies would be better placed to deal with their foreign counterparts.
“It is an important entry point for Zimbabwe companies to trade with other companies,” he said.
“At the moment, we are busy negotiating with other companies that want to invest and this is something that they will look at.”
Based in Nairobi, Kenya, the ATI was established in 2001.
It was established under an International Treaty by African member states at the initiative of the Common Market for Eastern and Southern Africa with the support of the World Bank.
Its mandate is to provide medium- to long- term credit as well as increase its provision of trade, credit and political risk insurance products that encourage foreign direct investment and trade in Africa.
Meanwhile, Deputy Mines and Mining Development Minister Fred Moyo yesterday moved, on behalf of Minister of Industry and Commerce Mike Bimha, a motion for the ratification of the treaty in Senate.
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