Insurer 'no' to Madagascar exports

Sunday Times 24.04.2002

John Sukazi

South Africa's largest export credit insurer, Credit Guarantee, said today it would not reinstate cover on new export contracts to Madagascar despite the changing political situation.

Credit Guarantee general manager Gernot Krüger said his company would not reconsider its position in the near future as "according to us, Madagascar remains a very unstable country".

Credit Guarantee withdrew export cover to Madagascar on April 2 following the escalation of political violence estimated to have killed 35 people and brought the island state's economy to a standstill after a disputed December 16 2001 election between incumbent President Didier Ratsiraka, who has ruled Madagascar for more than 20 years, and opposition leader Marc Ravalomanana, a rich businessman.

Ravalomanana said he won the election outright and declared himself president of the country in March, claiming massive vote rigging by Ratsiraka supporters.

Thousands of Ravalomanana supporters then seized control of the capital, Antananarivo.

Ratsiraka relocated his government to his eastern coastal stronghold of Toamasina, and orchestrated a blockade of roads leading into the capital to starve the opposition stronghold of fuel.

Prospects looked bleak for a way out of the deadlock, but Senegal's President Abdoulaye Wade managed to entice both leaders to Dakar, Senegal, to attend a meeting on the New Partnership for African Development (NEPAD) last week.

He then brokered a deal that would result in a recount of the election, and if that proved inconclusive, then a new election would be held under international supervision.

On Monday Madagascar's high court began recounting ballots from the election. The court expects the recount to take several weeks, and said it would still be possible to reconcile copies of ballots collected at the country's estimated 16,000 voting stations.

Given the uncertainty, Credit Guarantee will not reinstate export coverage.

"In the next coming weeks the situation could easily change for the worst and we do not want to find ourselves caught in between," Kruger said.

However, all shipments to Madagascar that were affected before March 28, 2002 will remain covered by the agency.