Business
The African Development Bank helps Nigeria with the initial financial facility, among others to enable it start operations in the country
The African Development Bank Group, through its Trade Finance operations, has approved a US$14.12 million facility to support the Federal Republic of Nigeria’s membership in the African Trade Insurance Agency, ATI. This is a critical and mandatory step to enable the ATI commence its operations in Nigeria. Nigeria, as Africa’s largest economy, joins 14 other African countries that have already signed up to ATI membership.
Once membership formalities in the ATI are finalised, Nigeria could benefit from gross political and commercial risk insurance cover on total investments and trade amounting to over $5 billion by 2020. The catalytic effect of using limited financial resources in this way is undoubtedly massive.
The approved facility complements ongoing and planned interventions geared at building institutional capacity and improving the resilience of the Nigerian economy. Joining the 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.
The 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. The 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 5 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.
According to Stefan Nalletamby, the director of the Financial Sector Department: “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.”
– Jan. 8, 2019 @ 15:39 GMT |
Tags: AfDB approves $14.12 million to support Nigeria’s membership in ATI agency
