The 51st Annual Conference and General Assembly of the African Insurance Institute opened in Addis Ababa today, marking Ethiopia’s return as host after 23 years and capping a five-year effort to bring the forum back to the capital. The event attracted delegates from over 93 countries, bringing together policymakers, insurers, and economists to confront the mounting pressures facing Africa’s insurance landscape—most notably the deepening crisis of sovereign debt.

In his opening address, Ethiopia’s Deputy Prime Minister Temesgen Tiruneh outlined the country’s ambition to become Africa’s preferred insurance destination. He pointed to sweeping economic reforms, a fast-growing private sector, and a policy framework designed to encourage innovation, trade, and investment. Among Ethiopia’s major initiatives is the formation of an independent insurance regulatory authority, aimed at bolstering oversight, protecting policyholders, and improving the overall competitiveness of the financial sector.

However, much of the discussion at the conference was grounded in hard fiscal realities. Dr. Corneille Karekezi, CEO of African Reinsurance Corporation, delivered a stark assessment: 72% of GDP in many African countries is being channeled toward debt repayment. “Imagine spending 72% of your salary on debt—what’s left is hardly enough to sustain operations,” he said. Africa has borrowed more than USD 1.1 trillion since 2010, equivalent to 40% of its collective GDP. This rising debt burden, he warned, is directly linked to the vulnerability of the insurance industry, especially where insurers hold significant portions of government securities.

Fikru Tsegay, Deputy CEO of Ethiopian Reinsurance, echoed those concerns, stressing that sovereign debt levels shape how international rating agencies evaluate domestic insurers. “The credit rating of a country, macroeconomic stability, and the regulatory environment all feed into how companies are assessed,” he explained. “Even well-managed firms in low-rated economies are penalized in the global market, undermining their competitiveness.”

Governor of the National Bank of Ethiopia, Mamo Mihretu, echoed the reformist outlook, noting that Ethiopia’s ongoing macroeconomic shifts are laying the groundwork for a more sustainable and inclusive financial and insurance system. “Resolving credit-related constraints is key to unlocking the full potential of our insurance industry,” he stated. Mamo highlighted legal and operational improvements already underway and credited strong national leadership for guiding reforms that encourage private sector growth and investment. He further stressed that Ethiopia’s digital transformation is improving efficiency across the board, particularly in the insurance industry where digitalization is expected to improve service delivery and risk assessment.

Experts also highlighted the persistent gap between GDP growth and insurance penetration across much of Africa. Despite the continent’s vast population and growing economic footprint, insurance uptake remains low. Dr. Karekezi attributed this disconnect to underdeveloped financial literacy, weak economic structures, and limited investment in value-added industries. “Africa is rich in resources,” he said, “but converting that into economic power requires knowledge, innovation, and investment.”

The discussion also turned inward, with speakers urging African governments to take greater responsibility for domestic inefficiencies. While global shocks like COVID-19 and geopolitical conflicts have played a role, Dr. Karekezi stressed that internal mismanagement is a major factor behind the debt spiral. “We can’t blame everything on external shocks,” he said. “Many of our problems are homegrown, from poor allocation of loans to a failure to prioritize long-term resilience.”