The Ministry of Finance and the German Development Bank, KfW, have signed a financing agreement under a partnership between Germany and Ghana to the tune of €16 million.
The agreement will enable Ghana to secure its shareholding and membership into the African Trade Insurance (ATI) Agency, a multilateral investment guarantee institution that mitigates investment risks in Africa.
This was after Ghana met all the criteria required to finalise her membership with the ATI, after signing the first financing agreement under the Reform and Investment Partnership with Germany.
A Deputy Minister of Finance, Mr Charles Adu Boahen, signed the agreement on behalf of Ghana, while a Director of the KfW in charge of Central Africa and Regional Funds, Dr Jan Martin Witte, signed on behalf of the bank.
Present at the signing event was the German Ambassador to Ghana, Mr Christoph Retzlaff; the Director General and Special Envoy for the Reform and Investment Partnership from Germany, Dr Stefan Oswald; and the acting Chief Executive Officer (CEO) of ATI, John Lentaigne.
The funds, provided by the German Development Cooperation under the partnership, would enable Ghana to complete its membership in ATI.
Membership in the ATI will provide Ghana with increased access to insurance products that will help mitigate risks to investors in both debt and equity.
ATI insures investors against non-payment and non-honouring of sovereign and corporate risks.
As one of the largest providers of investment and political risk insurance, ATI presently insures upwards of $6 billion worth of transactions in Africa.
The partnership between the two countries, through the Federal Ministry for Economic Cooperation and Development (BMZ), was launched in 2017.
Its purpose was to promote private sector investments and sustainable economic development under the G20 ‘Compact with Africa’.
Furthermore, it seeks to encourage a partnership model that is based on mutual trust and accountability.
Signing the agreement, Mr Adu Boahen said the support from Germany to enable Ghana to complete the processes of becoming a member of the ATI was timely as the country sought to create a more favourable environment for private investors as well as open up opportunities to foreign companies.
Dr Witte described the signing as an important milestone, saying it made Ghana a forerunner and a role model for others to follow.