…FG to enjoy $5bn Insurance Cover
The African Development Bank (AfDB), through its trade finance operations, has approved $14.12 million facility to support the Nigeria’s membership of African Trade Insurance (ATI) Agency.
The regional bank in a statement said once membership formalities of ATI are finalised, Nigeria could benefit from gross political and commercial risk insurance cover on total investments and trade amounting to over US$ 5 billion by 2020.
The statement quoted AfDB’s Director of Financial Sector Department, Stefan Nalletamby, as saying that the bank seeks to achieve its ambitious development mandate by working with 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 said.
According to AfDB, the facility support remains a critical and mandatory step to enable ATI commence its operations in Nigeria.
The bank said that joining ATI would 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.
These products, he stated, 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,” the bank added.
It further noted that 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.
“Nigeria, as Africa’s largest economy, joins 14 other African countries that have already signed up to ATI membership.
“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.
“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,” the statement said.