This article was produced with the support of ATIDI
What often unlocks progress is not the absence of risk, but the confidence that those risks can be understood, managed and mitigated. As African Trade & Investment Development Insurance (ATIDI) marks its 25th anniversary at its Annual General Meeting from 30 June to 3 July in Nairobi, its journey reflects the transformation of Africa’s investment landscape – by providing innovative insurance solutions that help de-risk trade and investment, build confidence among partners and turn Africa’s potential into opportunity.
Twenty-five years ago, Africa presented a very different proposition to investors. Many of the continent’s economies were emerging from periods of political and economic turbulence, navigating the difficult path towards stability and growth. Capital markets were relatively shallow; infrastructure deficits were acute, and perceptions of risk often outweighed recognition of opportunity.
In 2000 foreign direct investment (FDI) flows into Africa stood at approximately $9bn, reflecting the limited scale of international capital them reaching the continent. While investment flows increased, they remained concentrated in a handful of countries and sectors, with financing for major infrastructure and industrial projects continuing to be difficult to secure. Unlocking Africa’s potential required greater confidence, stronger partnerships and solutions capable of bridging the gap between risk and investment.
It was against this backdrop that ATIDI was established in 2001. Its objective Is straightforward: to help reduce the risks that deter investors and lenders from committing capital to African markets.
Today Africa has witnessed a significant expansion in investment activity, with foreign direct investment (FDI) flows reaching higher levels than those recorded in the early 2000s, despite fluctuations across regions and sectors. This evolution has been further supported by initiatives such as the African Continental Free Trade Area (AfCFTA), which is creating a more integrated continental market of 1.3bn people and strengthening opportunities for trade and investment.
A quarter of a century later both the organisation and the continent it serves have changed significantly. Africa’s regulatory and legal frameworks have advanced, financial sectors have deepened and new investment opportunities have emerged. Yet significant gaps remain and the work of strengthening institutions, improving market efficiency and creating an enabling environment for investment continues across much of the continent.
The story of ATIDI’s first 25 years is therefore about more than the evolution of a single organisation. It is also a story about Africa’s own economic journey and the gradual development of the financial architecture needed to support growth.
Born in an era of uncertainty
The early years of the 21st century marked a defining moment for Africa. The continent was beginning to attract growing international attention as an emerging investment destination, with vast opportunities across infrastructure, trade, energy and industry. Yet, alongside this promise was a persistent challenge: perceptions of political instability, regulatory uncertainty and sovereign risk continued to influence investment decisions.
For many investors, these concerns translated into higher financing costs, stricter lending conditions, limited access to capital, or in some cases, a decision not to invest at all. The challenge was not simply the existence of risk; every investment carries risk. The challenge was that many African markets were perceived as carrying risks that were difficult to assess, price or manage.
It was within this environment that organisations such as ATIDI emerged, to help bridge the confidence gap between opportunity and investment. Through political risk insurance and other risk mitigation solutions, ATIDI was created to provide investors, lenders and businesses with greater confidence to engage in African markets.
Fundamental. Investment decisions are shaped not only by the potential returns of a project, but also by the availability of mechanisms that can help manage uncertainty and protect against unforeseen risks.
By helping address these concerns, risk mitigation institutions perform a critical function in unlocking investment, often working behind the scenes to make projects bankable, strengthen partnerships and enable economic transformation.
This role has become increasingly important as African countries have sought to mobilise greater volumes of private capital to finance development priorities. ATIDI’s journey over the past 25 years is therefore not only a story of institutional growth, but also a reflection of Africa’s evolving investment landscape.
Growing alongside Africa
As Africa’s economies evolved, so did ATIDI. The continent experienced a prolonged period of economic expansion during the 2000s, driven by a combination of commodity demand, macroeconomic reforms, demographic growth and increased international engagement. Telecommunications expanded rapidly, banking sectors deepened and a growing number of countries attracted significant investment in energy, infrastructure and industry.
The financial requirements of this new phase of development differed considerably from those when ATIDI was founded. Investors and businesses increasingly required solutions beyond traditional political risk coverage. Cross-border trade expanded. Governments sought new ways to mobilise private-sector financing for development priorities.
As a result, ATIDI broadened both its reach and its product offering. Its membership expanded steadily, extending its presence across different regions of the continent. Its activities increasingly supported trade finance, credit enhancement and investment facilitation alongside its original mandate.
This evolution mirrored a wider trend within African finance. Over the past two decades, development finance institutions, commercial banks and multilateral organisations have adapted to changing market conditions and increasingly sophisticated financing needs.
One of the clearest examples is infrastructure finance. Across Africa, inadequate infrastructure remains one of the principal constraints on economic growth. Expanding power generation, improving transport links and strengthening digital connectivity require significant investment, with the African Development Bank (AfDB) estimating that the continent needs between $130bn and $170bn annually to address its infrastructure financing needs.
Infrastructure projects often involve long investment horizons, complex financing structures and multiple stakeholders, making risk mitigation a critical factor in attracting lenders and investors.
The same principle applies to trade. While attention is often focused on tariffs, logistics and market access, sustainable trade growth also depends on confidence and access to financing. Businesses require assurance that commercial risks can be managed.
In 2023 the organisation formally adopted the name African Trade & Investment Development Insurance. The change recognised the expansion of ATIDI’s mandate beyond its original focus, reflecting its growing role in supporting the interconnected relationship between trade, investment and development in Africa’s growth journey.
A new investment landscape
Over the past decade alone, investors have navigated a global pandemic; supply chain disruptions; geopolitical tensions; inflationary pressures; and rising interest rates.
Africa requires substantial investment to meet development objectives, support industrialisation, expand energy access and strengthen climate resilience. Achieving these ambitions will require mobilising significant levels of capital, with developing countries facing a financing gap of around $4 trillion annually to meet the Sustainable Development Goals (SDGs) by 2030.⁴
At the same time, competition for global capital is becoming more intense. Attracting investors’ attention requires not only compelling opportunities but also confidence that risks can be understood and managed.
Climate change is becoming an increasingly important consideration for investors and policymakers alike. Financing the energy transition and building climate-resilient infrastructure will require unprecedented levels of investment over the coming decades.
Similarly, the implementation of the AfCFTA presents both opportunities and challenges. Unlocking its full benefits will depend on practical mechanisms that enable businesses to operate across borders with greater confidence and certainty.
The story of ATIDI’s first 25 years is therefore closely linked to the story of Africa’s economic transformation. Both have evolved significantly since 2001, adapting to new realities, responding to emerging challenges and creating new pathways for growth.