- The Republic of Senegal and the Agence pour l’Assurance du Commerce en Afrique (ACA) today signed a Participation Agreement to meet the final conditions of the Government of Senegal’s membership in ACA.
- The Participation Agreement will be accompanied by a capital contribution of 15 million euros, financed by the European Investment Bank (EIB), for Senegal’s accession to the ACA following the signing of a financing agreement between Senegal and the EIB in October 2020.
- Membership in ACA will enable Senegal to attract longer-term financing at competitive rates, and will give international investors and financiers assurance that sovereign transactions and other investments are supported by the government. ‘ACA, a highly rated and reputable insurance guarantee provider.
Dakar, August 24, 2021 – The Republic of Senegal and the Africa Trade Insurance Agency (ACA) today concluded and signed a Participation Agreement, the last precondition for the Government of Senegal to join AC. The Participation Agreement will be followed by the payment of a contribution of 15 million euros to ACA by the European Investment Bank (EIB) on behalf of the Government of Senegal, following a financing agreement concluded and signed between Senegal and the EIB in October 2020.
Membership of ACA will enable Senegal to attract funding at competitive rates and over the longer term. ACA’s investment grade rating helps mitigate investment risks and gain investment insurance capacity to cover large borrowings, allowing Senegal to meet the conditions of international lenders and investors . ACA is increasingly seen as a strategic development partner for African governments, providing between 1% and 2% of the annual GDP of its member states and participating in some of the continent’s largest strategic development projects with a view to boosting investment and intra-African trade in support of the African Continental Free Trade Area (AfCFTA).
Senegal’s accession to ACA is part of the country’s strategic plan (2019-2023) which aims to contribute to the achievement of the government’s national socio-economic development strategy. In addition, the local private and public sectors will also benefit from the provision of innovative insurance solutions to support trade and investment, and will also strengthen Senegal’s access to foreign direct investment (FDI) for the country’s economic growth.
ACA’s current exposure to Senegal stands at US $ 21 million, thanks to ACA’s pan-African mandate which allows it to support strategic transactions in non-member countries. This gross exposure is expected to increase over the next few years, as trade inquiries from Senegal amount to more than USD 4 billion – mainly covering the finance, energy and infrastructure sectors.
The ratification and signing of the ACA Treaty in March 2020 by the President of Senegal, HE Macky Sall, grants ACA a privileged creditor status in Senegal, recognizing ACA’s role as an insurer of last resort and therefore, the need to repay the ACA all claims and collections made in connection with sovereign bonds or defaults. The governments of Angola, Burkina Faso, Cameroon, Egypt and Chad are also expected to become members of ACA in the coming months, as they work to finalize the various membership conditions.
Quote from H.E.M. Amadou HOTT, Minister of Economy, Planning and Cooperation, Senegal
Quote from Mr. Manuel MOSES, CEO of ACA
“The Republic of Senegal is on track to become the 19th ACA member state. We commend the country’s commitment to strengthening inclusive economic growth which will certainly pave the way for more sustainable growth and development in Senegal. ACA is committed to deepening its support to Senegal, especially during the COVID-19 pandemic, as the country can benefit from the risk mitigation and credit building services offered by ACA to expand FDI and trade flows in Senegal ”.
Mr. Amadou HOTT, Minister of Economy, Planning and Cooperation
“The guarantee instruments and services offered by ACA are useful for our country. They can serve as a development catalyst for an acceleration of our economic growth in harmony with our current priorities reaffirmed in PAP 2A of the PES.
Thus, with Senegal’s option to make private investment and Public-Private Partnerships (PPP) one of the levers of PSE PAP 2A, ACA can serve as a reliable interface between the public sector and the private sector. for solid and win-win partnerships for our country ”.