Africa should claim a bigger slice of the $450 billion in cover, through Export Credit Agencies

ECAs combined provide billions in cover or direct financing annually around the world, surpassing even institutions such as the World Bank By Michael Tichareva This new month of August we begin off by continuing with our discussion on credit enhancement and risk mitigation instruments to facilitate infrastructure investments, a critical need for Zimbabwe. This week we take a particular look at the role of Export Credit Agencies (“ECAs”). These are predominantly public agencies and entities that provide government-backed loans, guarantees and insurance to facilitate exports from their home countries. ECAs provide cover either by means of insurance to the exporters or bankers or by means of a direct guarantee to the bank or other investors covering a loan to an overseas borrower to finance the supply of goods and services. The guarantees protect the lender in the event of any default in payment by the buyer or the borrower under a loan agreement. Such insurance cover or guarantees could be a combination of comprehensive cover, covering both commercial and political risks, or only political risk cover. (adsbygoogle = window.adsbygoogle || ).push({}); Commercial risks are typically covered up to 85%, whilst political risk cover can range from