(Business in Cameroon) - Cameroon has just taken a big step towards its goal to enter into the capital of the African Trade Insurance (ATI) Agency. Indeed, on March 9, 2020, the Minister of Economy, Alamine Ousmane Mey, signed a XAF7.4 billion loan agreement with Nikolaos Milianitis, Director of the European Investment Bank (EIB) for the Central African region. The said loan, with an interest rate of 7.49%, is intended to cover Cameroon's contribution to the capital of the African Trade Insurance (ATI) Agency.
This multilateral organization covers political and commercial credit risk in Africa. In concrete terms, it assists African member states to reduce borrowing costs. It is an alternative to the conventional sovereign debt currently representing nearly 60% of African public debt.
"Our country’s attractiveness has been enhanced. Therefore, the country will attract more foreign capital which is indispensable for the development of our key sectors. This is a new decisive step towards the increased mobilization of additional financing that we know is necessary for the successful implementation of Cameroon's vast public investment programme," said Alamine Ousmane Mey delightfully after signing the loan agreement.
With this investment supported by the EIB, Nikolaos Milianitis explained, the private sector will have access to a comprehensive guarantee and insurance mechanism, which will contribute to the improvement of the business climate. "This operation will potentially improve the cost of financing public debt and facilitate the implementation of public-private partnership projects," said the EIB representative.
ATI's share capital is variable and based on an initial authorized nominal capital of USD 1 billion. It is divided into 10,000 shares with a par value of USD 100,000 each. Members may subscribe to those according to the category under which they are joining the agency.
Category A (the one requested by Cameroon) shares are open to African States. This category must at all times represent at least 51% of the share capital of the ATI.