Kenya’s shareholding in African Trade Insurance Agency (ATI) has been diluted further following a $14.8 million (Sh2 billion) equity injection by Japan’s export credit agency Nippon Export and Investment Insurance (NEXI) into the pan-African underwriter.
The Japanese agency’s capital outlay is now the equivalent of 3.2 percent of total capital by investors in the underwriter, effectively bumping down the shares attributable to the other shareholders.
Angola’s $25 million (Sh3.5 billion) subscription into the agency last month also dilute the shares of members whose total capital outlay in ATI has now climbed to $456.8 million (Sh64 billion) from $417 million by June 2022.
Kenya, which was until last year the top shareholder in the agency, has a capital outlay of $30.4 million in ATI, which is equivalent to 6.65 percent of ATI’s total, down from 7.29 percent prior to the investment by NEXI and Angola.
The country was recently pushed down to third spot in ownership following capital injections by Togo and Benin. By virtue of being the founding shareholder, Kenya was given the permanent right to host the headquarters of other agency.
NEXI’s capital investment comes three years since it established a Japan desk at ATI’s Nairobi offices to support Japanese businesses investing in Africa’s developmental and commercial projects.
“To date, the “Japan desk” has promoted support to both Japanese and African business with an active gross exposure valued at $1.1 billion in the information & communication, Financial & Insurance activities, and construction sectors in Côte d’Ivoire, Egypt, Ethiopia and Nigeria,” said ATI in a statement.
ATI’s shares are structured under different classes, with African member states holding Class ‘A’ shares which at all times represent not less than 51 percent of the agency’s issued capital stock. No country is however allowed to hold more than 25 percent of total shares.
Other shareholders such as non-African states, regional economic organisations, development finance institutions and private corporations and export credit agencies hold shares variously classified rom ‘B” to “E’, and are each limited to a maximum holding of 15 percent of the total at any point.
Member States have been increasing their investment in ATI through new capital contributions or reinvesting their dividends.
Other than raising their ownership, the additional contributions have helped shore up the capital of the agency which offers guarantees fulfilments of contracts, credit, and political risk insurance.
ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa, and has so far supported more than $78 billion worth of investments and trade into Africa.
The insurer draws most of its business from the countries which are its shareholders, including Kenya. The agency’s Kenyan exposure stood at $726.98 million (Sh101.8 billion) in June 2022, up from $720.37 million (Sh100.9 billion) in December 2021.
