Nigeria is set to become the second West African country to join the African Trade Insurance Agency (ATI) as the African Development Bank Group (AfDB), through its Trade Finance operations, approves a $14.12 million facility to support the country’s membership in ATI. Nigeria needs at least $7.5 million, which is the cost of minimum share subscriptions for an African State to qualify for ATI membership.
Once the membership process is completed, the Nigerian government as well as private sector investors will be eligible to receive important support that will help boost key industries and provide access to competitively priced credit and loan facilities for institutions in Nigeria, joining 14 other African countries that have already signed up to ATI membership. Nigeria could benefit from gross political and commercial risk insurance cover on total investments and trade amounting to over $ 5 billion by 2020, a statement by the AfDB noted.
The Bank further noted that 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 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,” the statement further said.
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 catalyzes private sector investments in infrastructure projects, thereby promoting economic integration of participating countries into regional markets.