A new organization opened its doors in Kigali this month. The African Trade Insurance Agency (ATI) stepped into Rwanda to fill an important gap in the insurance market. The company, unlike private insurers, has a development mandate to improve the business climate in COMESA (Common Market for Eastern and Southern Africa) member countries.  Rwanda is one of the founding member countries and was involved in the initial assessment report that established ATI.

Toward the end of the last decade, several COMESA countries came together to look into the causes for the low rates of Foreign Direct Investment (FDI). Their report concluded that political risk was the main obstacle preventing investors from doing business in their countries. Using World Bank funding, they then pooled their resources to create an Export Credit Agency (ECA) – called ATI.

“ATI fills two objectives. We fill a void in the existing market by providing insurance protection to cover investors against political risks. We also provide protection against non-payment risks which impact banks, exporters, and virtually any company entering into a contract. Our second goal is to work with local insurance companies to help them increase their product range and capacity.” (Julius Karuga, the resident underwriter who is now based in Kigali).

US Ambassador to Rwanda, Donald Koran, was a featured speaker at the launch. Ambassador Koran highlighted the increased investor confidence that ATI’s trade insurance will bring to the region.  He was joined by the evening’s chief guest, Rwanda’s Minister of Finance and Economic Planning, the Honorable John Rwanbomgwa. Minister Rwanbomgwa gave ATI an enthusiastic welcome noting that ATI has covered over $180 million in trade and investment into Rwanda and with the local office in place the figure may double or triple in one to two years. ATI’s presence is a win-win for the business community.

Since 2001, ATI has facilitated over $6 billion worth of trade and investments into COMESA member countries – including Rwanda which benefited from over an additional $185 million in inflows.  The company employs a strategy aimed at attracting international partners from the private and public sectors. Insurance giants such as the Lloyd’s of London Insurance syndicates, Atradius, SACE and others have partnered with ATI on several projects.

“For international insurance companies, our local presence and our S&P ‘A’ rating makes a big difference. They have come to rely on our risk assessments rather than those coming from general news sources. Our aim is to help create a more balanced view to the outside world of African risk,” notes Mr. Karuga.

USAID COMPETE has been an important public sector partner for ATI’s regional expansion – since 2008, ATI has opened four offices in Rwanda, Tanzania, Uganda and Zambia (which also serves Malawi).

“USAID is pleased to support ATI as it expands its footprint in East Africa.  It is a welcome addition to improving the business climate – a critical shared goal of both COMESA and the USG,” says Matthew Rees, USAID/East Africa, Regional Trade Adviser.

While investors looking for quick returns continue to flock to Africa, the issue of risk, particularly political risk continues to be their biggest concern. According to the World Bank's Multilateral Investment Guarantee Agency (MIGA) annual survey of global investors’ risk perceptions, developing countries attract two-fifths of global Foreign Direct Investment (FDI) but political risk remains a significant obstacle to investment in these countries. 

For African countries, which still lag behind the world in terms of FDI figures – offering investors a solution to their political risk concerns will be key to boosting FDI inflows. Africa currently stands behind all regions with just 0.5% of inflows in contrast to other developing regions such as Asia, which stands at 11% and the Middle East at 19%.

Robert Bayigamba, President of the Private Sector Federation of Rwanda and also Rwanda’s representative on ATI’s Board of Directors played a pivotal role in the launch of ATI’s office in Kigali.

“ATI is the closest thing African countries have to an ECA. In most developed countries, for nearly a century national ECA’s have provided insurance coverage to their exporters and investors. This helps countries to be globally competitive. With a local office in Kigali, Rwanda can now benefit from this service,” commented Mr. Bayigamba during the launch event held at the Serena hotel.

While ATI has been doing business in Rwanda over the past several years, they have not had a local presence. With a local office in place they hope to double the trade and investments they’ve already facilitated into Rwanda over the next year.

Hubert Ruzibiza, the Acting Head of Services Development for the Rwanda Development Board notes that for investors coming into Rwanda the ATI cover will provide more security.

“With ATI on the ground in Rwanda, now we can tell investors that when you come to Rwanda you are covered. Your investments are secure. This should provide a boost to investor confidence and hopefully our bottom line.”

In January, the Eastern African Fine Coffees Association (EAFCA), held its annual Taste of Harvest (TOH) Coffee Cupping Competition in Uganda.  COMPETE has long-supported EAFCA’s efforts to strengthen and institutionalize TOH in participating countries, expand into new geographies and establish its reputation as the region’s leading coffee quality identification initiative.  TOH provides a country’s producers, millers and exporters a platform to showcase their coffees and compete amongst themselves and with their neighbors.  It also provides EAFCA with the unique information and data to effectively market and promote the region’s coffees.

This year’s event, which received tremendous support from the Uganda Taste of Harvest Committee, the Uganda Coffee Development Authority and the Uganda Coffee Trade Federation, featured several “firsts”, which will allow EAFCA to expand the impact of TOH to an even larger section of the African coffee value chain.  For starters, in addition to the traditional Arabica TOH, EAFCA held the first ever Robusta TOH, which employed newly developed Robusta cupping protocols that were modeled on the Specialty Coffee Association of America’s Arabica protocols and were developed by the Coffee Quality Institute, another COMPETE partner.  Another first was the addition of the Democratic Republic of Congo to the Taste of Harvest calendar, which expanded TOHs reach westward and brings the total number of participating countries to seven.   

Robusta Taste of Harvest

Robusta coffee is incredibly important to East Africa’s coffee value chain, particularly in Uganda and Tanzania.  Robusta coffees have traditionally been ignored by the specialty coffee segment, which considers Robusta inferior in terms of cup quality to Arabica, and as a result they trade at prices well below the global average and are used primarily to stabilize commercial blends.  There is, however, a growing appreciation among certain segments of the market for differentiated, higher quality Robustas and their unique attributes in the cup.  In Uganda, a panel of six certified R-Graders (cuppers trained/certified in the new protocols) cupped 17 Robusta coffees, 10 of which were submitted by various Coffee Farmers’ Associations (CFA).  In fact, the top three samples were all from CFAs.  Promoting fine Robusta coffees among specialty coffee buyers will certainly be an uphill battle but according to Head TOH Judge, Rocky Rhodes, who said, “If the story of the quality can be told about these coffees I am sure they will demand a higher price”. 

Inaugural DRC Taste of Harvest

Kivu 3 and 4 coffees from the Bord du Lac region in the east of the Democratic Republic of Congo were once considered among the finest coffees from Eastern Africa.  Unfortunately, decades of civil strife and insecurity combined with depressed global coffee prices and infrastructure challenges had a devastating impact on the DRC’s coffee sector.  Despite the challenges, a handful of producers, traders and processors are rehabilitating old plantations and trying to revitalize the industry.  The inaugural DRC TOH is a testament to their commitment.  In all, seven coffees from DRC were cupped, of which six received scores above 83, which is well above the threshold required for specialty classification.  According to John Schluter of Café Africa the scores from the event are an excellent indication of the intrinsic quality and potential of Kivu coffees.  The overall quality of the DRC coffees surprised many of the judges, including Head Judge, Rocky Rhodes, who said “A hidden gem in this TOH was the DRC Arabicas. There were some that were really outstanding and should cause people to really explore that country’s coffee.  In an industry where buyers are looking for new and different origins, the DRC might represent the new frontier in African specialty coffees.”

Uganda Arabica Taste of Harvest

The Arabica TOH was still the main attraction for the Uganda competition and this year did not disappoint.  In a country where the quality of the Arabica coffee is often overshadowed by the dominance of Robusta, TOH is one of the only opportunities for Uganda’s specialty producers and exporters to showcase their product.  As a result, the industry takes the event very seriously.  In all, 35 samples were submitted, the majority of which were from the Eastern (Mount Elgon) and Western (Rwenzori) regions.  Of the samples, 32 cupped above 80 and were classified as specialty.  While most of the top finishers were washed Arabicas, a natural (unwashed) coffee finished third with a cupping score of 84.21.  All of the other DRUGARs – Dried Ugandan Arabicas – scored above 80, demonstrating the quality potential for well processed natural coffees.

The top five Arabicas from the Uganda National TOH will compete, along with all of the other countries’ winners, in the African Taste of Harvest, which will be held in Addis Ababa, Ethiopia during EAFCA’s 2012 Annual Fine Coffees Conference and Exhibition from February 16-18.