Improving the Role of Eximbanks/ECAs in the OIC Member States
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of shares), the Senegalese government (with 25% of shares), and a regional reinsurer for CFA
Franc zone, called CICA (International Conference of Insurance Controls (with the remaining
10% of shares). Therefore, as a majority privately-owned insurance company, SONAC operates
independently from government, but manages a political risk guarantee fund on behalf of the
State of Senegal.
For its surety business, a main focus for SONAC is guaranteeing performance of contractors for
civil works. It provides a financial guarantee against calling of bonds for 100% of the value of the
bond. Regarding the insurance activities, SONAC offers credit insurance to both companies and
banks. Under its credit insurance program towards companies, it provides risk coverage against
non-payment by foreign buyers for political risk up to 75% of the debt and commercial risk for
90% of the claim. As well, it offers domestic trade credit insurance covering the risk of default by
borrowers (local companies) for 85% of the claim. SONAC also offers credit insurance cover to
banks and funds to protect against risk of non-payment by borrowers.
SONAC S.A. is a member of the Aman Union and partners with the ICIEC. For its partner
organizations, it offers commercial information on the Senegalese market, as well as debt
collection services.
Analysis
As a majority privately-owned company, information on SONAC is limited. No annual reports are
published on the website. While SONAC does administer a fund on behalf of the State, no
information is available on how this fund is set up and managed.
SONAC is a small operation in a country whose exports are largely commodities such as
agriculture and chemicals, which are normally sold on short term. Senegal exports its goods and
services to a wide variety of foreign markets and therefore the risks exporters face are diverse
and broad. SONAC takes non-payment risk of foreign and domestic buyers.
From a public policy perspective, a key question for the government is the extent to which
Senegalese exporters have the facilities they need and are able to access the financing they need
from commercial banks to undertake and expand their export activities. Given the government’s
minority ownership of SONAC, it is unlikely that the company could be directly influenced to play
a greater role in facilitating exporters’ access to such financing, should this be identified as a key
area for increased government intervention. However, in SONAC’s role acting as agent for a
government fund, there is scope for a more targeted policy initiative.
3.4 Country Summaries: Arab Group
3.4.1 Algeria
Description
CAGEX was established in 1996 as a state corporation to promote Algerian exports and
particularly targeting SME clients. It provides export credit insurance covering commercial,
political and natural disaster-related risks of non-payment or loss of production. Such coverage
is expected to improve exporters’ access to credit and financing from local banks. CAGEX also