Germany to take stake in African risk insurer to boost investment

Germany will become a shareholder in African trade and investment insurer ATIDI, Development Minister Reem Alabali Radovan said during a visit to Kenya.

Germany will acquire a 3.5% stake in ATIDI (African Trade & Investment Development Insurance), Germany's Ministry for Economic Cooperation and Development confirmed in a release on Tuesday. 

The deal will make Germany the largest non-African shareholder in the agency, which is owned by 24 African countries and backed by 13 international financial institutions.

"We are committed to facilitating investment and trade so that more private capital flows to Africa," Alabali Radovan said, adding that both German and African companies would benefit from improved access to risk coverage for investments and supply chains.

She said the move would help German firms tap into what she described as Africa's "vast future market."

ATIDI provides insurance against political and macroeconomic risks such as coups or hyperinflation, which can deter foreign investors. The German government expects that broader access to such coverage will boost companies' willingness to invest in African markets.

The acquisition will be financed by about €15 million ($17.6 million) from the Ministry for Economic Cooperation and Development, as well as funds from the KfW Development Bank.

German companies are expected to gain access to ATIDI's insurance products in the future, complementing existing export credit guarantees such as Germany's Hermes cover, the ministry said.

During her visit to Nairobi, Alabali Radovan also met start-up founders and called for closer cooperation between German and African tech ecosystems. The Kenyan capital is often dubbed the "Silicon Savannah" due to its growing number of technology firms.