AfDB approves $14.12m to support Nigeria’s ATI membership
The African Development Bank Group says it has approved a $14.12m facility to support Nigeria’s membership in the African Trade Insurance agency.
In a statement made available to our correspondent in Abuja on Tuesday, the AfDB said Nigeria’s membership of the trade group was a critical and mandatory step to enable ATI to commence its operations in Nigeria.
It added that Nigeria, as Africa’s largest economy, joined 14 other African countries that had already signed up to ATI membership.
ATI is a pan-African institution that provides political risk insurance to companies, investors, and lenders interested in doing business in Africa.
According to AfDB, once membership formalities in ATI are finalised, Nigeria can benefit from gross political and commercial risk insurance cover on total investments and trade amounting to over $5bn by 2020.
The catalytic effect of using limited financial resources in this way is undoubtedly massive, according to the bank.
The statement read in part, “The approved facility complements ongoing and planned interventions geared at building institutional capacity and improving the resilience of the Nigerian economy.
“Joining ATI will enable Nigeria to leverage its position to mobilise additional resources to finance trade, especially importation of essential goods such as medicines and communications equipment, to rehabilitate basic infrastructure and strengthen the country’s productive sector.
“ATI’s mandate is to provide medium- to long-term credit and political risk insurance, as well as other risk mitigation products to its member countries and related public and private sector actors.”
It added, “These products directly encourage and facilitate foreign direct investment as well as local private sector investment in regional member countries and intra- and extra-African trade. ATI catalyses private sector investments in infrastructure projects, thereby promoting economic integration of participating countries into regional markets.
“This financing aligns with four of the bank’s high five priorities, namely: Light Up and Power Africa, Industrialise Africa, Feed Africa and Integrate Africa.”
As a trade finance facilitation initiative, this financing will support operations that are crosscutting and multi-sectoral in nature and will have an impact on agribusiness, infrastructure development, electricity generation, telecommunications and manufacturing.
The Director of the Financial Sector Department at AfDB, Stefan Nalletamby, said that the bank sought to achieve its ambitious development mandate by working with and through other strategic partners, and where possible, by supporting the development of strong and viable African institutions such as ATI.