The African Development Bank (AfDP) Group through its Trade Finance operations, on Tuesday announced the approval of a US$14.12 million facility to support Nigeria’s membership in the African Trade
Insurance Agency (ATI).
The funding support is critical and mandatory step to enable ATI commence its operations in Nigeria, as the country joins 14 other African countries that had already signed up to ATI membership.
A news report circulated by the Africa Press Organisation (APO) Group on the initiative on behalf of the bank’s management indicated that
once membership formalities in ATI became finalized, Nigeria could benefit from gross political and commercial risk insurance cover on total investments and trade amounting to over US$ 5 billion by 2020.
The report stated further that the approved facility complemented
ongoing and planned interventions geared at building institutional
capacity and improving the resilience of the Nigerian economy.
The AfDB Group stated further that joining ATI would enable Nigeria to
leverage its position to mobilize 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.
Specifically, 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 FDIs as well as local private sector investment in regional member-countries and intra- and extra-African trade. ATI catalyzes private sector investments in infrastructure projects, thereby promoting economic integration of participating countries into regional markets.
The report stated that this financing also aligned with four of the bank’s High 5 priorities namely, Light Up and Power Africa, Industrialize 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.
Commenting on why the continental development finance institution is providing support on the ATI, its Director of the Financial Sector Department, Stefan Nalletamby, explained that “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”, Nalletamby added.