Country: Ethiopia

Ethiopia Needs Greater Innovation, Market Dev’t to Broaden Insurance Uptake: NBE Deputy Governor

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Addis Ababa July 14/2023 (ENA) There is a need for greater innovation and market development to broaden insurance uptake in Ethiopia, Deputy Governor of National Bank of Ethiopia (NBE) Solomon Desta said.

Opening the conference held in Addis Ababa today with the theme ” Innovation for Resilience – Shaping the Future of Insurtech in Africa” Solomon said “We recognize the importance of innovation in addressing the challenges faced by the insurance industry.”

“In Ethiopia, there is a need for greater innovation and market development to broaden insurance uptake. Despite the recent history of financial sector liberalization and reform, the insurance industry in Ethiopia remains relatively underdeveloped.”

In light of Ethiopia’s significantly low insurance penetration, a new approach to insurance and market development is needed to catalyze greater uptake by consumers and to enable the formal market to tap into latent demand, he further elaborated.

The NBE is working towards setting up an independent insurance regulatory body, focusing on encouraging the insurance industry, he further pointed out.

Through this event, he said we aim to encourage collaboration, knowledge sharing and the adoption of innovative practices that will deliver the sustainable growth and expand access to insurance services for all Ethiopians.

Similarly, CEO of FSD Ethiopia, Ermias Eshetu said that the event presents an opportunity to showcase Ethiopia’s insurance sector and contribute to the advancement of the broader African insurance landscape.

By embracing innovation, fostering strategic partnerships, and creating an enabling regulatory environment, we can collectively drive positive change and enhance societal resilience, he noted.

FSD Ethiopia is dedicated to the achievement of accessible inclusive and sustainable financial markets that support Ethiopia’s long-term development goals, it was indicated.

Accordingly, the conference aimed to foster growth, facilitate strategic partnerships, and establish an enabling regulatory environment that supports the advancement of the insurance sector in Africa.

Financial Inclusion Specialist from FSD Africa Elias Omondi said for his part that FSD Africa works to catalyze innovation within the market.

“As FSD Africa, what we do is to catalyze innovation within the market, we want to see the insurance penetration in Ethiopia grow beyond 0.5 percent, we want to see those particular women that have no insurance get access to insurance, and the smallholder farmers get access to affordable solutions.”

Africa which is the most exposed continent is arguably the least protected in terms of insurance and that basically indicates there is a lot of work that we need to do as a continent, he noted.

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Ethiopia gears up for launch of first-ever securities exchange

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Addis Ababa, July 6, 2023 – Efforts are underway to develop Ethiopia’s financial market as the government prepares to launch its first-ever securities exchange in 2024.

In light of this, representatives from the public and private sectors, potential investors, policymakers, and regulators are meeting in Addis Ababa for a two-day workshop aimed at strengthening the capabilities of key market participants, preparing potential issuers and investors for the ESX’s portfolio of instruments, and garnering support from key policy-making institutions and regulators.

Speaking at the opening of the workshop on July 6, Antonio Pedro, Acting Executive Secretary of the Economic Commission for Africa (ECA), described the ESX as a “game-changer for Ethiopia and the region.” He stressed the importance of inclusivity, sustainability, and connectivity to harness the platform’s full potential.

The workshop is co-organized by the Economic Commission for Africa (ECA), Ethiopian Investment Holdings (EIH), Ethiopian Securities Exchange (ESX), and FSD Africa.

Mr. Pedro reaffirmed ECA’s commitment to supporting African countries in their socio-economic development and expressed enthusiasm for partnering with Ethiopia on this groundbreaking financial market initiative.

According to Brook Taye, Director-General of the Ethiopian Capital Market Authority (ECMA), the ESX will serve as a “key part of a functioning Ethiopian capital market ecosystem.”  Mr. Taye emphasized that ECMA was “fully committed to supporting the launch of the ESX and will work closely with the ESX team as it becomes a full-fledged securities exchange over the next year.”

Mark Napier, CEO, FSD Africa said: “We are pleased to be collaborating with the Government of Ethiopia in this historic initiative that will accelerate the development of capital markets in Ethiopia. Our assistance for establishing the Ethiopian Securities Exchange will leverage FSD Africa’s vast expertise and experience in developing capital markets infrastructure across Africa. This support signals our long-term commitment to a thriving capital market that is deep, liquid, and efficient”.

As a pioneer securities exchange and market organizer, said Michael Habte, ESX Project Manager, the platform will “play a critical role in the development and growth of the Ethiopian capital markets.” He stated that ESX will deploy a “state-of-the-art electronic trading platform for the equity and fixed-income markets as well as an innovative alternative capital market that caters specifically to up-and-coming SMEs.”

Mr Habte underscored the importance promoting accessibility of the market to issuers and investors in Ethiopia and abroad, including Ethiopia’s large retail and diaspora investor base.

“A thriving, deep, and liquid Ethiopian capital market will require the full support of valuable development partners to realize the catalytic development impact of a modern securities exchange as we embark on the launch of the Ethiopian capital markets,” said Mr Habte.

The capacity-building workshop addresses a wide range of topics, including the money market, fixed-income market, equity market, policymaking, and market development.

Experts from the National Bank of Ethiopia, ECMA, ESX, FSD Africa, Afreximbank, the International Growth Centre, NCBA Investment Bank, Old Mutual Investment Group, and the Pension Benefit Guaranty Corporation will deliver training presentations and participated in interactive panel discussions to share their valuable experiences and insights.

With technical support from ECMA and financial assistance from the Bill & Melinda Gates Foundation, the workshop aims to establish the groundwork for a prosperous securities exchange in Ethiopia. This initiative can spur economic growth while fostering a robust financial ecosystem for investors and issuers alike.

About ECA

Established by the Economic and Social Council (ECOSOC) of the United Nations (UN) in 1958 as one of the UN’s five regional commissions, the United Nations Economic Commission for Africa’s  (ECA’s) mandate  is to promote the economic and social development of its  Member States , foster intraregional integration and promote international cooperation for Africa’s development. ECA is made up of 54 Member States and plays a dual role as a regional arm of the UN and as a key component of the African institutional landscape.

For more information, visit:   www.uneca.org 

About EIH

EIH is a wholly state-owned company created under Proclamation No. 1263/2021 and Regulation No. 487/2022 as a strategic investment entity of Ethiopia to serve the strategic needs of its economy and build multi-generational wealth. EIH aims to achieve its purposes by bringing together public assets under a professional management structure and investing judiciously on a diversified range of strategic investment targets. EIH is operated as a private business organization with a view to driving performance of public assets using modern management practices, corporate governance standards, and systemic mechanisms to ensure the protection of shareholder’s interests.

About ESX

The Ethiopian Securities Exchange (ESX) is being established in line with the Capital Markets Proclamation (No. 1248/2021). Article 31 of the Proclamation provides that ESX shall be established as a share company by the government in partnership with the private sector, including foreign investors. The Government of Ethiopia is expected to hold a minority share in the establishment of ESX. The establishment of ESX is primarily led by EIH with the support of Financial Sector Deepening Africa (FSD Africa). A dedicated Project Offi­ce, the ESX Project O­ffice, leads the development work in preparation for the official launch of the exchange.

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It was announced that the purchase of the financial documents trading system to start the capital market is being completed

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In order to start the capital market, it has been announced that the process of purchasing financial documents from foreign companies is being completed.

After the establishment of the Ethiopian Capital Market Authority, the Ethiopian Securities Exchange (ESX), which is being established, is said to be selected and evaluated by a foreign institution that will develop the Internet infrastructure that will enable it to carry out its trading activities.

This was announced by the United Nations Economic Commission for Africa with partners on Thursday, June 29, 2015. He is at the Capital Markets Capacity Building Workshop held at the Radisson Blu Hotel. Representatives of the authority, the National Bank and foreign institutions supporting the capital market were present at the forum.

The Capital Market Establishment Proclamation stipulates that the Central Securities Depository (CSD) is a place where financial documents are stored in a consistent manner and converted to electronic, and where financial documents are traded and paid and delivered without physical transmission.

Wineshet Zeberga, a representative from the National Bank, said that having a strong Internet infrastructure is important for transferring ownership and marketing. The development of the infrastructure in Ethiopia’s capital market, he said, “will help us strengthen what we have been lagging behind in.”

“With the support we received from FSD Africa and with stakeholders such as the capital market authority and the securities market, we are working hard to have the infrastructure,” he said.

According to Tilahun Kasahun (Dr.), the senior project manager of the Ethiopian document Muale Newaiyo market that is being established, the selection of the institution that will develop the system has been completed and the stakeholders are conducting an evaluation.

Tilahun (Dr.) added that the evaluation which is being conducted by the National Bank, the authorities and the market will be completed in the next month and the selected institution and full information will be made public soon.

It is known that the Financial Sector Deepening Africa (FSD Africa) office, which is based in England and works on financial issues in various African countries, has provided financial support for the purchase of the infrastructure.

FSD Africa’s capital market specialist, Victor Nkirim, told a reporter how much the purchase was, and said that the contract will be announced and the purchase process is being finalized.

“Currently, a general evaluation of the structure and operation is being evaluated by the National Bank,” Victor added.

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Framework for a national nature strategy: Facilitating the development of national nature strategies that are aligned with the Convention on Biological Diversity

Executive summary

The economies of African countries, like those of countries in other global regions, are heavily reliant on natural resources. Nature loss and degradation pose signifi-cant risks for economic development and well-being. Investments to protect and restore natural environments can help safeguard African and other global regions from risks associated with environmental degradation and unlock new economic opportunities.

A national nature strategy can facilitate countries’ efforts to navigate an increasing-ly complicated normative landscape characterized by numerous compliance obli-gations and commitments, including those stemming from the Kunming-Montre-al Global Biodiversity Framework, national biodiversity strategies and action plans, and countries’ nationally determined contributions. National nature strategies can help countries respond to nature-related risks and opportunities, align policies with international, regional and market priorities, and make implementation and reporting more efficient. National nature strategies can also help countries im-prove climate-related outcomes at the many points where nature interacts with the climate.

In this report, the authors present a framework that can facilitate efforts by Afri-can and other countries to draw up and implement national nature strategies. The framework provides start-to-finish guidance and covers the implementation of nature assessments, the establishment of a national vision and related targets, the development of a strategy to deliver on those targets, strategy implementation, the exploitation of nature-related opportunities, the management of nature-relat-ed risks, and compliance with international obligations, such as those stemming from the Kunming Montreal Global Biodiversity Framework and from national bio-diversity strategies and action plans. The strategy was developed in collaboration with a wide range of stakeholders, including policymakers, nature experts and representatives of non-governmental and multilateral organizations.

The framework comprises four components, namely: (I) Baseline and ambition: rea-sons for a national nature strategy and outcomes to aim for; (II) Initiatives: actions to take in order to achieve the aforementioned outcomes; (III) Instruments: incentiviz-ing action to achieve desired outcomes; and (IV) Governance and implementation: planning and implementing the strategy and assigning responsibilities.

Advocating for Nature and Climate

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In this edition of the African Business podcast we speak to Elizabeth Maruma Mrema about her role as co-chair at the Taskforce for Nature-related Financial Disclosures. Maruma Mrema is also the United Nations Assistant Secretary General and the Deputy Director of the United Nations Environment Programme. She is one of Time magazine’s Most Influential People for 2023 – having been a key figure at the Nature COP 15 in Montreal spearheading a groundbreaking agreement on biodiversity protection.

In this episode she tells us how the Taskforce on Nature-related Financial Disclosures (TNFD) was established to develop a risk management and disclosure framework for organisations, aiming to shift global financial flows towards nature-positive outcomes.

As climate change and nature are interconnected, an integrated approach has become necessary to effectively address these challenges. Maruma Mrema tells us about the significance of integrating nature-related disclosures within climate-related reporting and the role of corporate disclosures in promoting transparency and accountability.

The TNFD also complements the Task Force on Climate-related Financial Disclosures (TCFD). By integrating nature-related information into financial decision-making processes, businesses can mitigate risks, identify sustainable opportunities, and contribute to nature conservation. The TNFD has closely aligned its recommendations with the TCFD to promote consistency and facilitate the adoption of an integrated climate-nature disclosure framework.

We also look ahead to the launch of the TNFD framework in September in New York and to Cop28 in December in the UAE.

Read an excerpt from the interview in IC Intelligence Insights 09: Nature and Climte Redux 

Credits

Host and executive producer: Dr Desné Masie

Co-producer: Peter Doerrie

Digital Editor: Charles Dietz

Design: Jason Venkatasamy

Music: Corporate Uplifting Chill by MusicLFiles

Licence: http://creativecommons.org/licenses/by/4.0/

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Democratising insurance in Africa

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Opinion by: Elias Omondi

It is a cruel irony that Africa – the continent arguably most exposed to the risks and ravages of a changing climate and economic uncertainty – is also the continent least protected by insurance instruments. African insurance penetration drives 3% of the continent’s GDP, a figure dwarfed by the global average of around 7%, and premiums per capita are 11-fold lower than the world average.

Unprecedented ecological change, compounded by global economic instability and woefully disrupted international supply chains, demand that Africans and African businesses enjoy the basic security and protection of insurance products.  Moreover, the preponderance of small and medium-sized enterprises (SMEs) in Africa’s economic life only intensifies the need for some kind of safety net – so that already vulnerable communities are afforded a level of security to which they are surely entitled.

Though rarely cited as a fundamental bedrock for development, insurance and insurance-applicable technology are indispensable, and their importance is only growing. Indeed, the Brookings Institution characterises insurance as an “often overlooked” but nonetheless a crucial “behind-the-scenes factor driving growth at all levels of society, from family life to massive infrastructure projects to technology development”.

It is in this context that FSD Africa – the specialist development agency working to make finance work for Africa’s future – established the “BimaLab” programme in 2020. With the support of African regulators and backers such as Swiss Re Foundation, Prudential, SCBF, GIZ and FSD Ethiopia, we have developed an insurtech programme driving the development and scalability of inclusive and innovative insurance products which are tailored to address evolving African concerns and exposures.

BimaLab seeks to address – and ultimately plug – the “protection gap” predominant in Africa, cultivating the next generation of insurtech innovators through a combination of capacity building, technical assistance, funding support and help ensuring regulatory alignment and, where necessary, reform (take, for example, Ghana’s revisions of its Insurance Act to accommodate an “innovative licence category”).

Beginning three years ago with a pilot in Kenya, and then expanded to Nigeria and Ghana in 2021 and 2022, the programme has this year rolled out the accelerator programme in 10 African countries.

A cursory look at the numbers demonstrates the value this, and programmes like it, are already delivering for communities on the continent. In Kenya, Nigeria and Ghana, BimaLab-sponsored insurtechs have reached a million customers and have created 43 new insurance products and technologies. Moreover, close to 20 of BimaLab’s cohort have managed to sign strategic partnership agreements with major insurance players in the region, thereby accelerating the process of bringing new products and services to market and raising over $3m. Graduates of the BimaLab programme – CoverApp in Kenya, SosoCare in Nigeria and BeNew Insurance in Cameroon – have even won African Insuretech awards.

Bringing insurance to Africa’s SMEs

The urgency of democratising insurance in Africa derives in large part from the central role played by SMEs in the continent’s economic development. SMEs represent around 90% of all African businesses, generating 40% of the continent’s GDP and up to 80% of jobs. The resilience of these businesses, which do not enjoy the kinds of balance sheets that can withstand major disruptions unsupported, depends on our ability to create a viable and accessible insurance market.

Moreover, compounding Covid-19 and the economic chaos ensuing from the Russia-Ukraine conflict, African businesses are contending with the sharp end of climate change. Of the 10 countries most vulnerable to a changing climate, seven are located in Africa, and the sub-Saharan region contains 95% of the world’s rain-fed agriculture. Dwindling or unpredictable rainfall – as has been affecting East Africa recently – as well as rising temperatures, hurt small businesses in already impoverished communities, risking their economic collapse.

Access to insurance products has a transformative effect on the stability and resilience of African SMEs, through developing insurance products that are for once affordable and effective. Moreover, by supporting businesses at their most vulnerable, we can help cultivate the major enterprises of tomorrow, which will accelerate Africa’s development and its prominence in the global economy.

There is a widening protection gap in Africa that exposes tens of millions of people to radical unpredictability and leaves them entirely at the mercy of a rapidly changing climate and a destabilised global economy. By convening innovators, insurance companies, technology service providers, regulators and investors, we can transform insurance and the scale at which it is delivered, to communities where a basic safety net is of existential importance.

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Transform Health Fund raises $50m to scale proven innovative healthcare models in Africa

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7th June 2023, NAIROBI – FSD Africa Investments, AfricInvest, Malaria No More, and Health Finance Coalition (HFC) have announced the establishment of the Transform Health Fund (THF), a blended-finance fund for scaling proven and innovative healthcare models in Africa. THF has received commitments of $50 million reaching its target size for its first close.

The fund aims to respond to the critical healthcare financing gap in Africa while building a resilient healthcare ecosystem that improves access, affordability, resilience, and quality of healthcare for low-income patients. It will target three critical areas serving low-income patients: supply chain transformation, innovative care delivery, and digital innovation.

THF’s investments will target countries across sub-Saharan Africa, with a focus on East, Southern, and Francophone West Africa. This investment is designed to contribute to addressing the acute need for quality and affordable healthcare across the continent.

THF’s investment strategy explicitly targets health services for women as one of its main investment objectives. Some of its investments are constructed with a strong gender lens, targeting women-led businesses and serving increasing numbers of women.

Anne Marie Chidzero, Chief Investment Officer, FSD Africa Investments said: “FSDAi is excited to announce its catalytic capital investment in the innovative THF fund. We are proud that our capital contribution to this tranche of the fund facilitated the participation of other commercial and corporate private sector investors. Partnering with AfricInvest, HFC and the additional fund participants to strengthen the African healthcare system, particularly in a time of environmental stress and unpredictable climate events, is a high priority for FSDAi.”

Louise Walker, Head of Private Sector and Capital Markets Department, FCDO said: “The UK is excited with FSDAi to be a catalytic investor in the Transform Health Fund. This is an innovative partnership that brings together concessional and private finance which will in turn mobilise more capital, critical to making healthcare more accessible to and more affordable for low-income patients across the continent. I’m particularly pleased to see that investments will target women-led businesses and services will also focus on women, where we know maternal and infant mortality in Sub-Saharan Africa is well above SDG goals.”

AfricInvest, with its three decades of expertise and insight, will play a critical role in leveraging a wide range of support throughout many regions of the continent, providing financing for companies in the health sector, helping African local markets to both scale up their own healthcare systems as well as creating regional champions.

“As health financing needs continue to grow and healthcare demands increase, it is a critical we work toward closing Africa’s massive health financing gap,” said Martin Edlund, CEO, Malaria No More and Executive Director of the Health Finance Coalition. “The Transform Health Fund serves a vital role in catalyzing capital to scale healthcare solutions.”

THF’s partners include Royal Philips, Merck & Co., Inc., known as MSD outside of the United States and Canada, the U.S. International Development Finance Corporation (DFC), U.S. Agency for International Development (USAID), International Finance Corporation (IFC), Swedfund, FSD Africa Investments, Netri Foundation, Anesvad Foundation, Grand Challenges Canada (with funding from Global Affairs Canada), Chemonics International, and MCJ Amelior Foundation. The fund is expected to attract additional investors who share the goal of improving healthcare in Africa.

Lab announces new class of ground-breaking solutions to drive public and private investment in emerging markets

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LONDON – Members of the Global Innovation Lab for Climate Finance (the Lab) gathered in London to select the innovative climate finance solutions that will be accelerated in 2023. Lab members voted to choose six new models to channel investments in challenging sectors such as climate adaptation and gender equality.

“We are thrilled about the quality and breadth of the types of innovative financial solutions that we see in this new Lab cycle. It’s fantastic that our members continue to help the Lab expand our boundaries, focusing more on where we can have the highest impact on the ground,” said Dr. Barbara Buchner, Global Managing Director of Climate Policy Initiative.

The Lab is an investor-led initiative that identifies, develops, and launches promising solutions to drive critical public and private investment in climate change in developing economies. Each year, the Lab competition selects promising, early-stage ideas for sustainable investment and rapidly develops these ideas into fundable, scalable investment vehicles and business models.

“This year, we were excited to introduce a Gender Equality stream and expand our Africa program,” said Lab Associate Director Ben Broché. “We need to see a rapid scale-up of investment across sectors, and the Lab is always keen to take on new challenges: since we launched nine years ago, the Lab has developed 62 solutions that have mobilized USD 3.5 billion for climate action in emerging markets.”

In 2023, the Lab received around 150 applications from leading asset managers, development finance institutions, global NGOs, prominent project developers, financial services firms, and entrepreneurs. The winners will undergo seven months of analysis, stress-testing, development, and preparation for launch later this year.

2023 LAB WINNERS

Catalyst Climate Resilience Fund supports pre-seed climate adaptation startups that improve the resilience of vulnerable African communities, fostering a more robust ecosystem of climate adaptation innovations. Catalyst Fund and BFA Global, an innovation consulting firm headquartered in Kenya, spearhead the idea

Climate Resilient Landscape Finance (CRLF) is a first-of-its-kind model where financiers, conservancy management, and landowners collectively share the risks and rewards of sustainable land management activities. The proponent is Platcorp, an established microlender and asset manager in Eastern and Southern Africa.

Impact Financing Facility for Climate-Focused Social Enterprises offers blended finance instruments to support social enterprises adopting climate-smart technologies and establishing a track record to access commercial capital. The idea proponent is Villgro, an Indian social enterprise incubator.

Lendable Emerging Market Sustainability-Linked Loan Fund provides loans to SMEs for implementing climate solutions. Borrowers who reach targets get lower interest, and the fund earns carbon credits. Proponent Lendable offers financing solutions for companies with a positive impact.

Social Infra Ventures (SIV) is a pan-African rental platform to service low and lower-middle-income families and vulnerable groups in Africa’s secondary cities designed around women’s needs. SIV will partner up with Cardano Development to pilot the idea in Morocco.

The VOX VERT Land Use Transition Fund finances the transition to sustainable agriculture in the Brazilian Amazon and Cerrado regions through a private credit fund with a blended finance structure. The proponents are Vert, a securitization company, and Vox Capital, an impact investment house.

Lab Members’ Quotes

Ajibola Olalowo, Advisor, German Federal Ministry of Economic Affairs and Climate Action (BMWK), said: “The Lab has been successful in delivering impact over almost one decade. Investments in Lab ideas span the globe, including challenging sectors such as climate risk, nature-based solutions, sustainable cities, and gender equality. However, there is still work to be done in mobilizing private finance for climate action, and Lab’s ideas are crucial for strengthening private sector investments to keep 1.5° alive.”

Antha Williams, who leads Bloomberg Philanthropies’ environment program, said: “Innovative financial solutions that address the climate crisis are pivotal to transitioning to a low-carbon economy at the speed and scale necessary. The Global Innovation Lab for Climate Finance’s innovative approach helps identify, develop, and scale pioneering financial instruments that are making a tangible impact in combating climate change. Bloomberg Philanthropies is delighted to support the India Lab to help transform promising ideas into viable investment opportunities that drive climate action in India.”

Sumaiya Sajjad, Head of the Technical Assistance Facility, FinDev Canada, said: “FinDev Canada is committed to advancing opportunities in the gender and climate nexus area through our investments and partnerships, which includes our support to the Lab. Women are disproportionately affected by climate change despite being at the forefront of adopting climate-smart solutions. The Lab is well positioned to support innovative solutions with an intentional gender approach and to capitalize on the growing momentum across the investment landscape to increase gender-responsive climate finance offerings.”

Nine additional ideas made it to the finalist stage

  • Altree Kadzi Gender Climate Fund, Altree Capital
  • Climate Agriculture Debt Restructuring Facility (CADRF), Abt Associates
  • Food&Forest, Impact Bank Amazônia Securitizadora de Créditos S/A
  • Gender-Based Smallholder Economic Liberation Project, Prado Power Limited
  • Green India Fund, Green Artha
  • Infrastructure Climate Resilient Fund (ICRF), AFC Capital Partners
  • Mobilize: De-risking E-mobility, VAI Capital
  • Offgrid Finance Pop-up SPV, Offgrid.finance Limited

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Ethiopian Securities Exchange Invites Investors to Become Stakeholders

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The Ethiopian Securities Exchange has started its Capital Roadshow aiming to attract actors in the financial sector into buying shares and becoming stakeholders of ESX. It also announced that it would commence issuing licenses to capital brokers, dealers, and advisors in September this year.

Foreign and domestic investors can purchase 75% of the shares of ESX while the rest of the ownership goes to the Ethiopian Government through Ethiopian Investment Holdings. It is expected that ESX will become fully operational as of January next year.

It is to be recalled that the National Bank of Ethiopia (NBE) announced in May 2022 that three well known global companies were desirous to participate in ESX. Financial Deepening Africa (FSD Africa) has already signed an agreement to become a shareholder in the securities exchange. According to NBE, IFC has also shown an interest to participate in the securities exchange.

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South African insurance stakeholders commit to sustainable insurance and building a resilient economy

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May 12th, 2023, JOHANNESBURG – South African insurance stakeholders have stressed the importance of all businesses across Africa in engaging with the net-zero ambitions, agreeing that by playing its role, the insurance industry will be critical in building a sustainable environment for the future.

FSD Africa and the Financial Sector Conduct Authority (FSCA) held a C-Suite breakfast session with CEOs of South Africa’s Insurance Industry and Regulators with a call to action to commit to the Nairobi Declaration on Sustainable Insurance as a first step toward creating a sustainable insurance industry and building resilience for the continent.

The event was an opportunity to cover the risks, challenges and opportunities facing the South African insurance industry in adapting to and mitigating climate change and responding to broader sustainability objectives. The session highlighted key considerations for South African insurance market players to enhance the resilience of the South African economy and have a responsive sector primed for contributing toward a more sustainable future. It is estimated that South Africa holds 70% of the African insurance industry’s market premiums1. As investors and stewards of significant financial resources, the sector must consider the role they play on the continent in driving sustainability objectives.

Formally launched in April 2021, the Nairobi Declaration on Sustainable Insurance (NDSI) is a declaration of commitment by African insurance industry leaders to support the achievement of the UN Sustainable Development Goals (SDGs). The Declaration was first unveiled in Nairobi, Kenya, at the UN Environment Programme’s Principles for Sustainable Insurance (PSI) initiative 4th Africa summit – hosted by ICEA LION Group as a founding signatory – and momentum continues to build.

With backing from more than ten inaugural signatories, the Declaration brings together senior leaders to accelerate solutions to a set of major sustainability challenges – ranging from climate change and ecosystem degradation to poverty and social inequality – that have assumed even greater urgency in a post-Covid-19 world. Currently, 102 organisations across the continent have signed up to the declaration.

Since its launch, FSD Africa has supported the Declaration through a series of events and thought leadership engagements as it encourages more institutions to sign up. The first in a series of planned C-Suite meetings was hosted in Lagos, Nigeria, in March 2022 by UNEP, FSD Africa and the National Insurance Commission (NAICOM) of Nigeria. Other C-Suite events have been held in Cairo, Egypt, Nairobi, Kenya and Addis Ababa, Ethiopia.

Speaking during the event, Kelvin Massingham, Director, Risk and Resilience, FSD Africa said: “Mainstreaming resilience into Africa’s economic development is essential to secure future prosperity and sustainable growth. Now is the time for the African insurance sector to play the significant role it should in creating this resilience. The Nairobi Declaration on Sustainable Insurance’s proactive and market-based approach is exactly what we need, and the commitment today is a strong statement to work together towards an African-led solution.”

Unathi Kamlana, Commissioner, Financial Sector Conduct Authority said” The financial sector is fundamental as an allocator of capital within an economy. We will continue working collaboratively with stakeholders, in South Africa and more broadly, to ensure that our sector is efficiently and effectively able to intermediate and direct capital flows in support of sustainable outcomes, while appropriately pricing for risks and promoting investor confidence.”

Anthony Phillipson, British High Commissioner to South Africa, said: “The financial sector has a key role to play in delivering our climate commitments. I am happy to see that sustainable finance is fast becoming a cornerstone of our UK-South Africa green partnership. I particularly welcome collaboration to strengthen capacities and embed sustainable practices across the insurance and pension industries in South Africa.”