The African Development Bank Group (AFDB), through its Trade Finance operations, has approved the sum of $14.12 million facilities to support Nigeria’s membership in the African Trade Insurance Agency (ATI).
The grant was a giant stride and mandatory step to enable ATI to commence its operations in Nigeria.
Being Africa’s largest economy, Nigeria joins 14 other African countries that have already signed up to ATI membership.
It was gathered that, once membership formalities in ATI are concluded, Nigeria could benefit from gross political and commercial risk insurance cover on total investments and trade amounting to over $5 billion by 2020.
Also, the approved facility complements continuing and designed interventions geared at building institutional capacity and improving the resilience of the Nigerian economy.
Membership of ATI will enable Nigeria to leverage its position in mobilizing 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 of the economy.
The mandate of ATI’s is to provide a medium for 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 partnership among regional member countries and intra- as well as extra-African trade.
This financing aligns with four of the Bank’s High 5 priorities, namely: (i)Light Up and Power Africa; (ii) Industrialize Africa; (iii) Feed Africa; and(iv) Integrate Africa.
Additionally, this development is a trade finance facilitation initiative that will support operations that are cross-cutting and multi-sectoral in nature and will have an impact on many sectors of Nigeria's development such as agribusiness, infrastructure development, electricity generation, telecommunications and manufacturing, among others.
According to the Director of the Financial Sector Department of AfDB, Stefan Nalletamby, 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.