The President of COSEC, the leading insurer in Portugal in the areas of credit and bond insurance, defended this Thursday that the treaty establishing a free trade zone in Africa is a good opportunity for the Portuguese companies to capitalise their positive reputation in the region. “It will be a good thing for Portuguese companies that have already done a good job in Angola, for example, to replicate that experience in other African countries”, Celeste Hagatong said in an interview to Lusa on the 50th anniversary of COSEC.
When questioned if the risk perception on the African continent is exaggerated by some non-African entities, recalling a few strong remarks by some prominent African bankers, businesspeople and statesmen, Hagatong remembered that criteria are equal for everybody and results can only depend on that.
“The various countries’ risk is evaluated the same way; if the rules are not the same for everybody, perception of them will not be that positive”, explained, exemplifying that “Angola and Mozambique are countries with a medium-term capacity of generating important volumes of income to themselves, with their oil reserves, their mining sector and agriculture. But these are not things that change overnight, and short-term is a risk in itself”.
The insurers, she added, “will not invest their capital in a country that might go through very convulsive times from a moment to another. On the other hand, credit agencies supporting exports can wait for the combined forces of two different government to agree on rescaling or on reviewing conditions. They are in very different positions.”
The African Continental Free Trade Agreement (AfCFTA) will establish a common framework for the liberalisation of services and goods and will also eliminate 90% of the existing tariffs. The African Continental Free Trade Area will be the largest market in the world, involving the 55 members of the African Union with a total GDP of about 2Bn euros.
Countries can implement a reduction in tariffs during a more prolonged period in the case of more critical products or keep the tariffs for all the other products at 10%. AfCFTA, whose purpose is to create a unified market for products and services, will come into force next 7th of July during the African Union Summit taking place at Niamey, Niger. The agreement has not been signed yet by Nigeria (the largest economy of the continent), Benin and Eritrea. However, South Africa, Egypt and Kenia have already ratified it.