Nigerian government has perfected plans to join the African Trade Insurance Agency ( ATI) with a $20 million commitment ,which is a strategy that would enable it attract more Foreign Direct Investments through insuring it’s Trade and Investments with its domestic and foreign peers.
The Nigerian government is also expected to make $30 million outstanding payment whilke getting the backing of the Legislature in order to become a full fledged memeber of ATI, which would open its doors wider to doing businesses with global and domestic partners,with the ATI support the deals by providing an insurance cover and lending othwr technical support.
Minister of Finance, Zainab Ahmad who confirmed the development in Abuja, at a Forum on de-risking Nigeria’s Investments and Trade, organised by African Trade Insurance Agency ( ATI) on Monday in Abuja said the Federal Executive Council had in September 2017 granted approval for Nigeria to join ATI, in order to provide risk guarantees for foreign investments and as well as boost exports in the country.
Ahmad expressed the hope that the entry of ATI would change the fortune of trade and investment flows, with the enabling environment which the Economic Growth and Recovery Programme of the present administration.
She said, ” Nigeria therefore feel justified with its decision to join this league of countries and International bodies as co-members in view of the expected value addition to the Nigerian economy. We believe that there could not have been a better time than now to subscribe to the agency considering that our economy our economic challenges are easing”.
The Chief Executive Officer of ATI, George Otieno said that the agency founded in 2001 by African states to cover the trade and investment risks of companies doing business in Africa has almost $300m in its capital base, and has made strong impact in 14 member countries within the region.
Otieno also noted that ATI’s presence in Nigeria was not meant to be competitive to other financial and insurance institutions, but provide some complementary solutions.
He stated that Nigeria’s membership of the agency will not only restore foreign investors’ confidence, but provide credit insurance solutions which can act as a form of collateral, therefore freeing up banks’ capital to allow them lend at greater volumes.
” There are numerous benefits to Nigeria becoming a member of ATI. First, investors and international lenders will look favourably on this action and second, the time couldn’t be better for our solutions. We can support the government to diversify the economy, boost banks liquidity, and even help the government to borrow internationally at ,ore competitive rates.
” This year ATI’s product will stand behind around 5 percent of all new FDI into Africa so joining ATI literally boost growth. Lastly, ATI is now paying dividends to shareholder making membership a near budget neutral decision for”, he added.
Tags: African Trade Insurance Agency