Regulators definitely have the Africa Continental Free Trade Agreement (AfCFTA) on their radar and it has become an agenda item when the insurance regulators from across Africa meet at a range of forums.
As members of the SADC Committee of Insurance, Securities and Non- Banking Financial Authorities (CISNA), for example, regulators meet and discuss the new trade agreement and its likely impact on insurance.
However, as Grace Muradzikwa, Commissioner at the Insurance and Pensions Commission (IPEC) in Zimbabwe, explained: “Our conversations are very nascent but we are aware that we need to bring this conversation up and to explore it thoroughly.”
One of the challenges, the group agreed, is that at government level there are different ministries taking a lead on AfCFTA. For example, in Zimbabwe it is being spearheaded by the Ministry of Foreign Affairs, while in Namibia it is being led by the Ministry of Trade.
One of the challenges this poses is in ensuring continuity in terms of discussion and implementation.
However, for the regulators there are some other key questions.
As Ms Muradzikwa explained: “Our role as regulators is to make sure our own markets are ready for whatever lies ahead.” Key to this, she said, is understanding how much the insurance and reinsurance CEOs are adapting and what their understanding is. She fears that little preparation is underway and potentially there has been little discussion internally within insurance entities on either the challenges or the opportunities ahead.
Georgina Shadaya, executive assistant to the Commissioner at Zimbabwe’s IPEC, said that at government committee level, there is some involvement of the financial services, with representatives from both insurance and banking on a committee. But again, she stressed, it is still at a very early stage of development.
For Grace Mohamed, GM: insurance and medical aid funds at Namibia’s regulator Namfisa, the whole continent is at “a nascent stage”. Before much can happen, she believes, there will need to be work on a framework to harmonise the model laws to ensure uniformity of approach.
Once there is an understanding of the similarities between laws, then work can begin on any harmonisation, she said. However, she warned that countries are at very different stages of implementation, so that work could take some time, to bring all 54 states together.
“The first thing [we need] has to be political buy-in,” she stressed.
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