Nigeria has just become a much better place to do business.
The African Development Bank Group, through its Trade Finance operations, has approved a $14.12 million facility to support the Federal Republic of Nigeria’s membership in the African Trade Insurance Agency (ATI).
The announcement comes as Nigeria faces a crucial election, which is being closely watched by risk-wary investors for policy direction.
Once membership formalities in ATI are finalized, 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 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.
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.
Stefan Nalletamby, the Director of the Financial Sector Department, said: “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.”
-Content by the African Development Bank and TMTV Media
Image: Lagos, Nigeria by Temitayo Aina via unsplash.com