African countries fast-tracking membership to ATI in response to expected trade and investment insurance capacity impact from COVID-19

• Togo becomes 18^th African country to join ATI, with a shareholding of
• US$12.5 million, through a concessional loan by the European Investment Bank.
• Membership in ATI provides African countries with additional trade and investment insurance capacity and improves risk rating for sovereign debts.
• Adequate insurance capacity critical component to cushioning against negative economic impacts of COVID-19.

The Government of Togo announced completion of the country’s membership in the African Trade Insurance Agency (ATI), becoming the 1    8^th African sovereign shareholder. Togo’s membership, backed by the European Investment Bank, reflects a trend that has seen a record number of West African countries join Africa’s multilateral guarantee agency with Ghana, Niger and Nigeria all completing membership in the last nine months. This trend is expected to continue as countries seek support to ensure investment and trade flows on the continent.

“As we ready ourselves to manage the economic fall-out from the Corona virus, African governments are focused on mitigating the short and long-term impacts. Insurance capacity is an important aspect of our ability to rebuild and to ensure that critical projects receive the funding and guarantee support they require. We see membership in ATI as a necessary component in our ability to shore up the economy and to weather this storm.” said Hon. Sani Yaya, Minister of Economy and Finance of the Republic of Togo.

 “The membership of Togo pushes ATI one step closer to achieving full pan-African membership from countries from coast to coast. The COVID-19 crisis increases the relevance of African development finance institutions such as ATI. As the world struggles to get a handle on this fast moving pandemic, the combined resources of African institutions will be needed to effectively counter this newest threat to Africa’s development.” said John Lentaigne, Acting CEO of the African Trade Insurance Agency

In tandem with the country finalising its shareholding, ATI backed Togo’s first access to international financial markets, with the country obtaining a quasi-concessional 10-year loan to reprofile and refinance a portion of its short-term and more expensive public debt. Togo was able to use ATI’s credit wrap to package the debt, helping the country achieve a borrowing rate in the low single digits.  

Reflecting the important role that ATI plays in the region’s economic growth, the European Investment Bank (EIB) provided a US$12.5 million concessional loan to cover Togo’s shareholding in ATI. The complete US$37.5 million financing package, finalised by EIB in 2019, covers the shareholdings of Niger, Togo and Cameroon, with Cameroon’s completed membership to be announced imminently and with additional financing possible for more countries to join in 2020.

“Close cooperation between African and European partners is key to successfully reduce the unprecedented impact of COVID-19 and tackle the negative economic impact of the virus both globally and in more vulnerable economies. Regional partners such as the African Trade Insurance Agency play a valuable role supporting economies across Africa by providing the insurance that helps to maintain investment and trade flows at a time when these are most needed.” said Ambroise Fayolle, Vice President of the European Investment Bank  

Membership of ATI opens a path for countries to reduce their debt levels, it equally provides global investors and financiers with comfort that sovereign transactions and other investments are back-stopped by a highly rated and reputable insurance guarantee agency.

There is a perpetual shortage of investment insurance in most African markets and, without it, vital investments, both equity and debt, as well as cross border trade will remain sub-optimal. The onset of Corona virus is compounding the shortage of such insurance in Africa. ATI’s presence is therefore now, more than ever, a key component of many countries’ ability to remain attractive investment destinations.

As African countries begin to build buffers against the likely negative economic fall out from COVID-19, investment insurance capacity is seen as a critical part of the financial support that will be needed to shore up the economies of many African countries.

Background information:

About The African Trade Insurance Agency

ATI was founded in 2001 by African States to cover the trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. In 2019, ATI closed the year with exposures of US$6.4 billion and continued to post record results for the eighth consecutive year with 132% growth on the net profit over 2018 owing to strong demand for ATI’s insurance solutions from the international financial sector and from African governments. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s.

The European Union’s many efforts this week to respond to the COVID crisis include a major participative initiative to harvest the ideas of organisations, experts, and ordinary citizens across the continent – in other words, a pan-European hackathon. The #EUvsVirus hackathon starts this evening (Friday, 24 April) and continues until Sunday afternoon – timing that makes clear the collective, voluntary nature of the work. The hackathon, whose agenda is here, will focus on six challenges: health and life; business continuity; social and political cohesion; remote working and education; digital finance; and ‘other’ issues. Some of the ideas you will hear more about in the coming weeks and months will, no doubt, be born here. One of the ambassadors of the event is a CoR member: Emil Boc (EPP), the mayor of Cluj-Napoca and former prime minister of Romania.

ESPON, the applied research programme aimed at supporting the formulation of territorial development policies in Europe, has collected on one page a list of COVID-related projects and actions taken by European associations of regions and cities, EU institutions, European research associations, and similar international organisations and groupings. The list, which is here, is regularly updated.

We have been informed of a new collaborative network that is not on the ESPON list, from the Netherlands. The Resilient Society offers a co-creation platform for two of the major cities in The Netherlands, one of its largest provinces, the national knowledge institute TNO, all four Dutch technical universities and many others. The network is currently discussing the possibility of cross-border partnerships.

The Latvian Association of Local and Regional Governments has an online platform on what municipalities are doing to contain the spread of COVID-19. The national government is providing grants to help cover some costs incurred by local governments during the crisis. The state is contributing to benefits to families or individuals, up to €40 per person per month for a period of three months. The state has also postponed tax deadlines. Among other measures are efforts to protect food; personnel involved in the distribution of food has been fitted out with protective clothing and gloves, and provided with disinfectant. More details here.

Looking beyond the EU, several non-EU associations and municipalities have been in contact with the CoR’s COVID-19 platform. The Local Government Association for England and Wales shared a page on which it has collected good local practices during the crisis; it can be found here. Two Turkish municipalities – Corlu and Sultanbeyli – also wrote in. Turkey has closed public buildings, postponed national and international events (including academic conferences), and halted sports competitions, after initially restricting them to being played behind closed doors. In mid-March, universities closed for a three-week holiday; distance learning has now been launched. The municipality of Corlu has created a hotline to provide information on the  coronavirus infection. Sultanbeyli Municipality, part of the Istanbul agglomeration, has disinfected many public spaces and services (streets, bazaars, pharmacies, parks, places of worship, public buildings, public transport, and garbage containers), installed hand-sanitiser dispensers at the entrance of marketplaces, and set three metres as the socially acceptable distance in bazaars. The municipality has been distributing masks, and raising awareness with, for examples, billboards and boards in many central areas. More details of Sultanbeyli’s efforts are here.

How should the lockdowns in place across the EU be lifted? In his capacity as head of the Irish delegation, Michael Murphy (IE/EPP) of Tipperary Council has written to the European Committee of the Regions to emphasise that localised, step-by-step approaches will be needed. Accordingly, the letter calls for local and regional authorities to be involved in the decision-making processes. This would also ensure that lockdowns are eased in an organised and systematic way.

The head of Spanish delegation, Guillermo Fernández Vara (ES/EPP), president of the region of Extremadura, has written to the European Committee of the Regions to underline that local and regional authorities need as much support as can possibly be given in their frontline role of helping citizens and local economies. The public wants a comprehensive approach based on brotherhood and solidarity; this is what the EU now needs to provide. (He highlighted the particular need to facilitate the reception and distribution of medical devices and protective equipment from outside the EU.) A comprehensive approach, he said, would require a significant increase in the EU’s budget together with an ambitious and exceptional European stimulus recovery plan.

The president of the Region of Valencia in Spain, Ximo Puig, has also written in, to highlight the necessity to stay united and work together in fighting the virus. In his letter, he calls for a European Marshall Plan that would mobilise all the necessary resources and instruments to guarantee social and territorial cohesion, ensure the stability and prosperity of EU citizens, and respond to the greatest threat since World War II.

The Lombardy region in Italy has put in place a three-year investment plan worth €3 billion, with €400 million earmarked for local authorities and €2.6 billion to support the local economy (including €400 million for strategic investments). Of the €400 million for local authorities, Milan and surrounding areas will receive €51 million for public works (roads and schools); the remainder can be spent by other communities on – for example – energy efficiency, renewable energy, urban re-development and sustainable development, sustainable mobility, heritage, and hydro-geological works. Separately, the region has set aside €10 million to produce medical and personal protective equipment, and €82 million in bonuses for health workers who have been involved in combating the epidemiological emergency.

Authorities in the Valle d’Aosta region of Italy have approved two packages of measures to cope with the economic crisis and lack of liquidity. Under a bill presented by CoR member Pierluigi Marquis (EA) on 23 March, they allocated €3.7 million to help business, workers, and households, and €2 million to top up employees’ salaries. The region has also suspended mortgages for one year and has set up a risk fund to support SMEs and the local economy, to last 48 months. These resources come from central government. On 17 April, the regional council followed up with a second package, this time worth €25 million.

The Spanish region of Valencia has launched seven innovative projects targeting COVID-19. One project is to develop an open-source prototype of an economically affordable ventilator. Three projects seek to harness artificial intelligence to enable early detection of the disease. Other projects aim to create a diagnostic test, a system for the analysis of the immune system’s response to the virus, and a tool to measure the effectiveness of antivirals. The region received 265 proposals in one week, for grants totalling €562,818. As a result of the success of this first phase, the call was increased to €3,250,000. To keep up to speed, follow the Twitter handle @GVAinnova. The region has also been distributing gloves and face masks en masse. With the help of the Vefa Social Support team, it has provided thousands of food and health packages to the elderly or people living alone.

The Government of Navarra in Spain and its CoR member Mikel Irujo Amezaga (EA) have provided fresh information about the region’s crisis measures. At a cost of €2 million, and working through the public body Sodena and private companies, the regional government has secured a large consignment of sanitary material (masks, gowns, gloves and hydro-alcoholic solutions, among others) from China. The regional government has also channelled the energies of citizens towards creating face masks and facial screens for health personnel. As well as facilitating the 3D printing of personal protective equipment (PPE), a new platform now puts volunteers in contact with organisations providing basic social services and health care. As of 15 April, 104 projects had been reported. The platform can be found here.

The Regional Ministry of Health in Murcia, Spain, has launched an online tool to make a better record of cases of coronavirus and avoid transmission among citizens. The regional government has launched a Strategic Plan for the Recovery of Industrial Activity, with differentiated approaches. Efforts in the education sector include the development of a collaborative platform to facilitate online adult education and distance learning, as well as the provision of content and material for other digital education platforms. More details here. Separately, the president of the Region of Murcia has stressed the need for a collective effort by European citizens, businesses, local and regional authorities, and national governments to ensure a robust economic recovery for all. He calls on the EU to provide its support, assistance and cooperation.

The southern French region of Côte d’Azur has put €36 million into France’s national Solidarity Fund for businesses. A first tranche of state aid was made available on 1 April; a second tranche – the fruit of collaboration between the state and the regions – has been available since 15 April. More details here.

In Lyon, confinement measures have been in place since 17 March. Leaving one’s home is permitted only with a certificate. Schools are closed. Tests for COVID are reserved for care staff and the most serious cases. The city has created a pool of volunteers – a ‘Metropolitan Reserve’ – to help ensure public services continue (such as telephone calls to vulnerable people and child-protection efforts) and provide help to other community activities, such as food banks. The city has also suspended rents for companies operating from Lyon Métropole properties – until June if necessary. Consideration is currently being given to a support fund for companies in the private sector.

The Kuopio region in Finland has created an online platform called ‘The Good Mood Kiosk’ that aims not only to inform the public about COVID-19, but also to encourage them to fight it. The platform collects various cultural and sporting tips from the City of Kuopio and other actors intended to support lifestyle changes. The platform, which is constantly updated, suggests that now is a good moment to learn something new, to improve lifestyles, and to enjoy experiences for which people did not previously have the time or opportunity. The Kiosk also offers a wide range of free online books, and points to museums that are offering online tours and presentations.

The Portuguese municipality of Mafra has increased its response capacity on several fronts, working with district authorities and the Metropolitan Area of Lisbon. Civil-protection actions include the creation of a diagnostic unit to trace contacts, the acquisition of personal protective equipment, the reinforcement and patrols, the closure of beaches, the suspension of mass activities, disinfection, and a public-information campaign. To address the social challenges created by the virus, a Social Emergency Fund has been created to support families (with an initial €1 million) and a Municipal Emergency Fund of €500,000 to meet immediate needs. A project has been set up to provide support to the isolated or to at-risk groups. Various municipal taxes and fees have bee suspended, reduced or removed.

The municipality of Mosina in Poland’s Wielkopolska province on 3 April agreed a package of support for local businesses, and, at the same time, encouraging them to cooperate with each other to ease the recovery. Among the measures (listed here) are postponements to tax submissions and tax payments, the remission (in full or in part) of some tax arrears. The town collects taxes on real estate, agriculture, forestry, and modes of transport.

I would first like to thank all our health workers, doctors and researchers who are working around the clock to save lives.

I would also like to offer words of support to those who are ill and are fighting the virus as we speak.

This pandemic is putting our societies under serious strain. The well-being of each EU member state depends on the well-being of the whole of the EU.

We are all in this together.  Fighting Corona and its consequences will take time but we have already made a lot of progress and taken bold action.

Members of the European Council today held their fourth video conference to deal with the COVID-19 and its consequences. We have expressed a strong will to move forward together.

We discussed progress on the various dimensions of the European response to the pandemic and welcomed the Joint European Roadmap towards lifting of COVID-19 containment measures. We all agreed that the health and safety of our citizens comes first.

We also agreed to continue to follow the situation closely, in particular as we approach the holiday season, and to coordinate as much as possible to ensure a gradual and orderly lifting of restrictions.

We welcomed the Joint Roadmap for Recovery. It sets out some important principles, such as solidarity, cohesion and convergence. It further defines four key areas for action: a fully functioning Single Market, an unprecedented investment effort, acting globally, and a functioning system of governance.

It is of utmost importance to increase the strategic autonomy of the Union and produce essential goods in Europe.

Following the meeting of the Eurogroup in an inclusive format on 9 April 2020, we endorsed the agreement on three important safety nets for workers, businesses and sovereigns, amounting to a package worth 540 billion euros.

We called for the package to be operational by 1 June 2020.

We also agreed to work towards establishing a recovery fund, which is needed and urgent. This fund shall be of a sufficient magnitude, targeted towards the sectors and geographical parts of Europe most affected, and be dedicated to dealing with this unprecedented crisis.

We have therefore tasked the Commission to analyse the exact needs and to urgently come up with a proposal that is commensurate with the challenge we are facing.

The Commission proposal should clarify the link with the MFF, which in any event will need to be adjusted to deal with the current crisis and its aftermath.

The Eurogroup in an inclusive format will continue to closely monitor the economic situation and prepare the ground for a robust recovery.

We remain committed to giving the necessary impetus to work on the recovery fund as well as the MFF, so that a balanced agreement on both can be found as soon as possible.

The illegal drilling activities by Turkey in Cyprus’ Exclusive Economic Zone were raised by some Member States. We expressed our full solidarity with Cyprus and recalled and reaffirmed our previous conclusions on this matter.

We decided to hold a video conference with the Western Balkans on May 6.

Visit the meeting page

“All European governments and institutions are under great scrutiny from citizens. We cannot think of delaying the actions that are needed, we share a responsibility for a rapid response.

“There is a need to use all the tools available, particularly for the reconstruction plan. We need to help the recovery of our economies, to protect our assets, and at the same time, restore jobs and opportunities for growth. We have to do this together. Nobody can think of doing it alone. We need a new Marshall Plan, but funded this time by Europe. That, of course, brings challenges, because we must do it together and in a spirit of strong solidarity.

“In my speech today, I explained to Heads of State or Government the need to get out of this crisis with a true European community response. We must come out of it with a stronger and more communitarian Europe. One in which efforts are shared. This is particularly important for those countries that cannot afford to meet the burden of this reconstruction effort with further deficits.

“We are very much in favour of recovery bonds as a tool to finance this reconstruction effort. We have already made ambitious proposals but I think today leaders will need to be even more ambitious.”

In a remote voting session, the Civil Liberties Committee endorsed the readmission agreement with 54 votes to 13. The deal for cheaper short-stay visas that are issued more quickly was backed by 61 MEPs, while 6 voted against.

Return of people residing illegally in the EU

Under the readmission agreement, Belarus commits to readmit its nationals who do not, or who no longer, fulfil the conditions in force for entry to, presence in, or residence on, the territory of EU member states. This will also apply to persons who hold a residence permit or a valid visa issued by Belarus, and those who illegally entered EU territory directly after having stayed on, or transited through, the territory of Belarus.

Visa facilitation

The general visa fee for both Belarusians and EU citizens travelling to the other territory for up to 90 days in any 180-day period will be reduced to €35 (some categories of travellers will be exempt from paying fees). The deadlines for consulates to deal with requests will be reduced to 10 calendar days (extendable to a maximum of 30 days). Some Belarusian travellers, such as journalists, students and members of official delegations, will be able to receive multiple-entry visas that will be valid for longer and they will have to submit fewer supporting documents to justify their purpose of travel.

EU citizens can already enter Belarus without a visa for periods of up to 30 days, provided they cross the border at Minsk International Airport. For longer periods, of up to 90 days in any 180-day period, the new agreement will apply reciprocally.

Respect for human rights and democracy

MEPs underline that Belarus has engaged in the last few years in improving the respect of universal freedoms, the rule of law, and human rights, including the freedoms of speech, expression and of media, and labour rights. They also stress that these all constitute fundamental criteria for the EU’s policy towards third countries and that the visa facilitation agreement could be suspended, totally or partially, for human rights and democracy considerations.

The two agreements will not apply either to Denmark or Ireland.

Quotes

Petar Vitanov (S&D, BG), rapporteur for the readmission agreement, considered that “the EU should engage more with all Eastern partners, despite the challenges or perhaps, even more so, because of them, as deeper relations should extend the frontiers of the area of freedom, security and justice”. Looking ahead, Vitanov asked for “a more active role for the EP in the opening and negotiations of future readmission agreements, as well as the subsequent monitoring of their application”.

“Simplification of travel to and from the EU for both Belarusian as well as EU citizens is an important step on the path for deeper cooperation and understanding between the EU and Belarus and also to intensify the dialogue on democratic values. I would also encourage the European Commission to come back to us one year after the agreement is in place, so that we can evaluate to what extent the agreement meets its intentions”, said Ondřej Kovařík (Renew, CZ), rapporteur for the visa facilitation agreement.

Background

Both texts were signed in January, after being negotiated for more than five years. Once the European Parliament gives its green light (likely in the next plenary, on 13-14 May), the Council and Belarus will have to formally conclude the ratification. The two agreements will enter into force at the same time, on the first day of the second month following conclusion.