PARLIAMENT yesterday domesticated the African Trade Insurance Treaty (ATI), which is aimed at ensuring the country against political and trade risks.
by VENERANDA LANGA
The treaty was brought to Parliament by Industry and Commerce deputy minister Chiratidzo Mabuwa.
However, opposition MPs raised concerns over Zimbabwe’s financial ability to pay the required $15 million premiums for the insurance scheme.
The backbenchers also questioned why it had taken government almost 10 years to ratify the treaty, which other African countries domesticated in May 2000.
Binga North legislator Prince Dubeko Sibanda asked whether insuring the country against those risks was a priority given the prevailing poverty levels and poor state of the economy.
Mabuwa said domestication of the treaty had the capacity to boost investor confidence and ensure Zimbabwean companies competed globally.
“The political risks that will be covered by ATI include political violence effects, terrorist disturbances, sabotage, and other risks that an investor could suffer as a result of political instability in the country. On that end, it will mean that if we are insured, the fear of losses by prospective investors will be averted because they know that political risks are covered and they will recoup their losses through the insurance,” Mabuwa said. “We have had a grant from the African Development Bank (AfDB) and we got into an agreement where the AfDB said for every $2 we are going to raise as a country, they are going to put a dollar. We were looking for a minimum of $7,5 million, but with the work we have done, we already have $15 million.
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“The Reserve Bank of Zimbabwe has already put together $10 million and it has been sourced from financial institutions within Zimbabwe who think there are more benefits if Zimbabwe accedes to ATI because our banks do not have ‘A’ rating. We are contributing towards an allotment of shares.”
Mabuwa said the delay in acceding to the agreement was caused by lack of financial resources.
“You have to get money first before acceding to ATI. After Parliament domesticates the treaty, we have 60 days to lodge the papers. ATI is actually looking forward to Zimbabwe becoming a member because of a number of investors who made inquiries to find out if their money would be in safe hands.”
