Africa-Press – Ethiopia. Governor of the National Bank of Ethiopia Mamo Mihretu emphasized that addressing sovereign debt is crucial to building a vibrant and resilient insurance industry in Africa.
The 51st African Insurance Organization (AIO) Conference and General Assembly kicked off today in Addis Ababa, Ethiopia, with a focus on the impact of Africa’s growing debt burden on the insurance industry.
Speaking at the conference, NBE Governor Mamo emphasized that many African nations are undertaking critical economic adjustments supported by international financial institutions and debt restructuring efforts.
However, he warned that success requires strong international coordination amid rising global uncertainties.
“For insurers Sovereign debt levels are not just numbers on balance sheet, but they shape investment strategies, asset liability matching, and, of course, consumer confidence as well.”
Addressing debt challenges therefore, integral to building a vibrant and resilient insurance industry, he stressed.
With respect to Ethiopia, Mihretu outlined the country’s ongoing Homegrown Economic Reform Agenda, which aims to restore macroeconomic stability and foster private sector-led growth.
Central to this agenda is our commitment to strengthening the private sector as engine of growth, innovation and job creation he said, adding “we are working to build an open and competitive and transparent economic environment where private investment, domestic and foreign as well, can thrive.”
These reforms aim to modernize our financial and insurance sectors, align them with international standards, and create a transparent, competitive environment for investment, Mihretu noted.
He also highlighted the growing impact of artificial intelligence (AI) in insurance, calling it one of the industry’s most transformative forces.
“AI driven insurers are using these technologies to offer tailored solutions by analyzing user data such as hedge metrics and lifestyle habits, to dynamically adjust policies and pricing,” the governor stated.
AIO President Patty Karuaihe-Martin on her part said as African countries are navigating complex economic challenges, it’s essential to understand the implications of the insurance industry.
Citing figures from the World Trade Organization (WTO), Karuaihe-Martin noted that Africa’s debt is rising at an alarming rate, placing enormous pressure on developing economies.
She warned that when debt grows too fast, it can have severe consequences from reduced investment in essential services to growing inequality and underdevelopment.
The current international financial system perpetuates inequality,” she said, adding “Developing countries face higher borrowing costs and limited access to affordable financing, trapping them in a vicious cycle of debt and underdevelopment.”
She also cited several AIO initiatives aimed at strengthening the industry’s resilience, including the AIO Chartered Insurance and Certification Program, focusing on leadership, microinsurance, agri-insurance, insurtech, and innovation.
Looking ahead, she called for stronger collaboration across the continent and welcomed efforts to build a harmonized regulatory framework under the African Continental Free Trade Area (AfCFTA) to enhance intra-African insurance cooperation.
“Ethiopia offers us a unique platform to explore solutions and guide our governments toward policies that improve the standard of living and protect the financial health of our people,” she concluded.
Yared Mola, President of the Association of Ethiopian Insurers, said the conference comes at a critical time as African insurers face economic uncertainty while pursuing growth and innovation.
The event brought together insurance professionals and policymakers from across Africa to discuss solutions for sustainable development amid fiscal challenges.
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