The African Development Bank Group (AfDB) has approved a $10.4m equity investment for the African Reinsurance Company (African Re) to strengthen it’s capital base and underwriting capacity required to support increasing demand for insurance products in Africa.
The AfDB says the investment will be through the acquisition of newly issued shares via a rights issue of Africa Re.
“The Board of Directors of the African Development Bank Group (AfDB) through its private sector window approved an equity investment of up to $10.4 million in Africa Re through the acquisition of newly issued shares via a rights issue”, the Bank said in a statement on July 4, 2011.
This increased capital is needed to strengthen the company’s capital base and underwriting capacity required to support increasing demand for insurance products across the continent, the statement said.
The AfDB indicates that “this transaction will contribute to macroeconomic stability on the continent and will bring about more private sector investment and growth across the continent.”
The Africa Re was established on February 24, 1976 by the signing in Yaoundé, Cameroon, of an international Agreement by the Plenipotentiaries of 36 member States of the African Unity (AU) and aim of reducing the outflow of foreign exchange from the continent by retaining a substantial proportion of the reinsurance premiums generated therein.
By Ekow Quandzie