International financial agency, the African Development Bank (AfDB) has offered Nigeria a $14.12 million facility to enable Nigeria’s membership of the African Trade Insurance Agency (ATI).
What does ATI entail
The African Trade Insurance Agency, also known as ATI, was established in 2001 by seven COMESA countries and with the technical and financial backing of the World Bank, to provide insurance against political and commercial risks in order to attract foreign direct investments into the region.
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 also catalyses private sector investments in infrastructure projects, thereby promoting economic integration of participating countries into regional markets.
ATI was created in 2001 to help drive much-needed investment insurance capacity to Africa in order to support higher levels of foreign direct investments.
The agency was launched in Kampala, Uganda and opened its doors in Nairobi, Kenya, ATI’s head office.
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What Nigeria stands to gain
According to AfDB, the membership is a critical and mandatory step to enable ATI to commence its operations in Nigeria, while despite being Africa’s largest economy, will be joining 14 others that have already signed up.
Once the membership formalities in ATI are finalised, Nigeria stands to benefit from gross political and commercial risks insurance cover on total investments and trade amounting to over $5 billion by 2020.
According to a statement from the bank, the catalytic effect of using limited financial resources in this way is undoubtedly massive and complements ongoing and planned interventions geared at building institutional capacity and improving the resilience of the Nigerian economy.
AfDB maintained that joining ATI will enable the country to leverage its position to mobilise additional resources to finance trade, especially importation of essential goods like medicines and communications equipment, to rehabilitate basic infrastructure and strengthen the productive sector.
The African Development Bank Group or Banque Africaine de Développement is a multilateral development finance institution. The AfDB comprises three entities: The African Development Bank, the African Development Fund, and the Nigeria Trust Fund.
The institution’s mission is to fight poverty and improve living conditions on the continent through promoting the investment of public and private capital in projects and programs that are likely to contribute to the economic and social development of the region.