Ecowas Plans U.S.$300 Million Reinsurance Agency
Plans U.S.0 Million Reinsurance Agency
The Economic Community of West African States (ECOWAS) Commission promises to float a Reinsurance Agency with a capital outlay of $300 Million to encourage Foreign Direct Investment (FDI) into the West Africa sub region.
The Agency will provide a window of Reinsurance to the insurance industry as well as mitigate the political risk to FDIs in the sub region. The $300 Million is expected to underwrite an exposure level of $1 billion.
Speaking at a workshop to study the feasibility of the Agency held yesterday in Abuja, Commissioner, Macroeconomic Policy of the Ecowas Commission, Dr. Ibrahim Bocar Ba, said the Agency will cater for risk in investment arising from political instability in the sub region.
Ba said: "Though the sub region has a higher return on investment than most regions, it still fails to attract its fair share of FDI due to the insecurity of investments," adding that the Reinsurance Agency will encourage investment in critical sectors like infrastructure (energy, oil, mining, road, backbone telecommunications infrastructure etc), and traditional sectors like manufacturing, agro-business and services.
In his remarks, Minister Counsellor, Head of Operations at EU Services in Nigeria, Pierre Philippe, said the Ecowas was on the right path as investment is a tool to promote economic development and security as seen in Europe for many years.
He expressed EU's support for the Agency but urged the commission not to focus just on political risk alone as there are other factors that shoe away investments from the sub region.
Some of the structuring options proposed for the Ecowas Investment Guarantee Agency or Ecowas Political Risk (PRI) Agency include an independent Agency with a business and technical assistance partnership with Multilateral Investment Guarantee Agency (MIGA), a member organization of the World Bank Group that offers political risk insurance and promotes foreign direct investment into developing countries.
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