Speaking at the 25th African Reinsurance Forum in Kigali, Rwanda on Monday, Smart, who is the group managing director/CEO, NEM Insurance Plc, said, though, AfCFTA emphasises the reduction of tariffs and non-tariff barriers, the facilitation of free movement of people and labour, capital, right of residence, right of establishment and investment, he added that, all the activities within the agreement had insurance components.
Quoting from the Africa Insurance Pulse, a research publication of the AIO, which carried out an extensive study on the AfCFTA, he said, the insurance executives interviewed in the research, hope that, in the long term, the successful implementation of AfCFTA will benefit all markets.
“In the short to medium term, however, they expect that the large markets such as South Africa, Morocco, and Kenya will benefit most. Insurance and reinsurance players that participated in the survey were optimistic about their future in the context of the AfCFTA. 75% do not believe the single market will become a threat to their business. Many reinsurers and global and regional insurers confirmed that they already operate under the logic of a single market,” he pointed out.
Stressing that many respondents in the survey believe that the insurance pie will grow with the single market, facilitating the expansion beyond their current reach of active markets, he added that, reinsurers that are active primarily in one or a few markets see this as a unique opportunity to diversify their risk portfolio.
“To get prepared, two-thirds of interview partners stated that they already reflected the impact of AfCFTA into their strategic planning, while the remaining group is waiting to gain more information on the impact of the free trade on them,” he said.
He had earlier said the African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world measured by the number of countries participating.
The pact, he added, connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion according to the African Union, even as he has the potential to lift 30 million people out of extreme poverty.
He, however, said achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.