The federal government and private sector investors would soon receive support that would help boost the key industries like banks as well as provide access to competitively priced credit and loan facilities for institutions in Nigeria.
In her opening remarks, the minister of finance, Hajiya Zainab Ahmed, represented by the director, International Economic Relations, Aliyu Ahmed, said in September 2017, the Federal Executive Council granted approval for the membership of Nigeria to African Trade Insurance Agency (ATI) to amongst others provide risk guarantees for foreign investments into Nigeria as well as Nigerian exports.
“Nigeria is encouraged by the rich profile of ATI being a multilateral institution, recognised under the United Nations charter with thirteen African countries as members. With shareholders such as AfDB, Trade Development bank, PTA reinsurance and common market for eastern and southern Africa (COMESA), Nigeria is pleased to join these members in view of the expected value addition to the Nigerian economy,” he said.
Speaking during a press conference of ATI yesterday in Abuja, on de-risking Nigeria’s investments and trade, the chief executive officer of ATI, Mr. George Otieno, said there were numerous benefits to Nigeria becoming a member of ATI. According to him, investors and international lenders would look favourably on this action.
“We can support the government to diversify the economy, boost banks liquidity and help the government to borrow internationally at more competitive rates. This year, ATI’s products will stand behind around 5 per cent of all new FDI into Africa so joining ATI literally boosts growth. ATI is now paying dividends to shareholder making membership a near budget neutral decision for government,” he said.
According to him, Nigeria has already paid $20million for its membership out of a total of $50 million. It is hoped that in few months from now, Nigeria would make the remaining payment of $30 million to become a full member nation.
ATI was created by African states in 2001 to cover the trade and investment risks of companies doing business in Africa with broad range of investment risk solutions in particular mitigating against the risks of sovereign and corporate non-payment and contractual breach.
As at 2017, it had supported $35billion in trade and investments across Africa in sectors of agribusiness, energy, export, housing, infrastructure, manufacturing, mining and telecommunications.
According to Otieno, ATI’s presence would help to reassure investors, particularly in the current election circle, an environment that often lead to investors delaying their planned projects in any African country undergoing elections. This risk may already be reflected in Nigeria’s FDI flows which totaled $1.2billion in the first half of the year down from $1.7 billion a year earlier.