Kutoane Kutoane: “Instability pockets in Mozambique not likely to spread”

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Kutoane Kutoane: “Instability pockets in Mozambique not likely to spread”

4:23 CAT | 13 Jul 2018

File photo / Kutoane Kutoane - CEO of The Export Credit Insurance Corporation of South Africa (ECIC)

The Chief Executive Officer of state-owned Export Credit Insurance Corporation of South Africa (ECIC), Kutoane Kutoane, said yesterday that he does not anticipate that instability in Mozambique could spread, claiming that the Evolution Perspective is positive.

“There are instability pockets here and there, especially in the north of the country, but we do not believe they are likely to spread, and [these pockets] do not determine the perception we have of Mozambique or the rating assigned by our internal teams, we even have an Economic Outlook [on the country] which is Positive”.

Kutoane spoke to Lusa in Abuja, Nigeria, where he attended the African Export-Import Bank (Afreximbank) Annual Meetings (AAM2018) which run until Saturday. The CEO of the state-owned company which provides insurance and loans to South African exporters said that “the reforms we are witnessing in Mozambique are taking place at an exciting time following the disaster of the missing funds, but the International Monetary Fund (IMF) has been in the country and has given good evaluations. ”

When asked what the agency’s rating on Mozambique are, Kutoane Kutoane said it was at level 5, on a scale of 1 to 7 where 7 is the most risky for exporters.

On risk perception in Africa, ECIC’s CEO acknowledged that “the ratings are critical to attracting investments in the country,” but stressed the need for “the safeguards given to investments to be adequate “and pointed out that export insurance is a good way to mitigate the risk of investors wanting to invest in Africa.

“It is true that because of the negative ratings it is more expensive to raise capital to invest in these countries, but the profits are also huge and as long as they are mitigated, the projects can move forward,” he concluded.

Afreximbank, Annual Meetings run until Saturday in Abuja, the capital of Nigeria, is a support bank for trade, exports and imports in Africa and were established in Abuja, 1993. It has a capital of 5 billion dollars and is based in Cairo.

Afreximbank’s shareholders are public and private entities divided into four classes that include African governments, central banks, regional and sub-regional institutions, private investors, financial institutions, credit export agencies and private investors, as well as non-African financial institutions and investors on an individual basis.

Source: Lusa