To facilitate its membership of the African Trade Insurance Agency (ATI), Nigeria has been given a $14.12 million facility by the African Development Bank (AfDB) Group.
Despite being Africa’s largest economy, Nigeria will be joining 14 countries that have already signed up. AfDb noted that the country’s membership was a critical step to facilitating the commencement of ATI operations. Once the membership formalities in ATI are finalised, Nigeria stands to benefit from gross political and commercial risks insurance cover on total investments and trade amounting to over $5 billion by 2020.
A statement released by AfDB said the catalytic effect of using limited financial resources in this way is undoubtedly massive and complements ongoing and planned interventions geared at building institutional capacity and improving the resilience of the Nigerian economy.
According to AfDB, joining forces with ATI will enable the country to leverage its position to mobilise additional resources to finance trade, especially importation of essential goods like medicines and communications equipment, to rehabilitate basic infrastructure and strengthen the productive sector.
Stefan Nalletamby, the Director of the Financial Sector Department said “the Bank seeks 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. This financing scales up the work of ATI by supporting the beneficiary RMCs to become members”.
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.
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 also catalyses private sector investments in infrastructure projects, thereby promoting economic integration of participating countries into regional markets.