The ECIC wants to broaden its portfolio and expand its presence in a number of African nations, including Ethiopia and the Democratic Republic of the Congo. The addition of non-capital items to ECIC’s product portfolio will enable it to assist a broader range of sectors, hence expanding Ethiopian and DRC commerce with South Africa. The reduction of trade barriers that will arise from the execution of the Africa Continental Free Trade Area agreement would help to encourage this.
According to Forbes Africa, the Export Credit Insurance Corporation (ECIC) provides political and commercial risk insurance to South African exporters of goods and services, as well as cross-border investors.
Its strategic focus is on emerging African and international markets that are regarded too hazardous for traditional insurers. Ethiopia and the Democratic Republic of the Congo (DRC) are two of Africa’s most populous countries, making them important markets for South African exporters and the ECIC.
Ethiopia is Africa’s fastest-growing economy, with over $50 billion in infrastructural projects in the pipeline. Ethiopia’s government has begun on an economic reform program to diversify the economy away from agriculture and allow for greater private engagement in important sectors of the economy in order to enhance growth and attract foreign direct investment. Exporters and investors will have more chances as a result, and demand for export credit insurance will rise.
“The ongoing civil war, which started in November 2019, created a highly uncertain environment in Ethiopia. The recent release of opposition political party officials from prison by the central government is a significant step towards a resolution of the civil war. Investments into Ethiopia for which ECIC was involved include a US$12,5 million in a cement plant by South Africa’s Pretoria Portland Cement (PPC) and a USD121,5m by Vodacom South Africa in 2021. ECIC provided political risk insurance cover for both investments.” – Forbes Africa
The expansion of ECIC’s product offering to include non-capital goods will enable it to provide support to a wider set of sectors and therefore expand Ethiopia and DRC trade with South Africa. This will be supported by the removal of trade barriers that will result from the implementation of the Africa Continental Free Trade Area agreement.
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