President Buhari finalizes Nigeria's membership in the African Trade Insurance Agency (ATI); ATI membership provides Nigeria with additional insurance capacity to foster new investments

Nigeria becomes a full member country at an opportune time. It is ahead of other countries accelerating their membership, given the challenges of insuring trade and investment during the COVID-19 pandemic and also recognizing potential post-pandemic opportunities.

Nigeria contributed USD 14.1 million to the capital of ACA (www.ATI-ACA.org) in 2019, thanks to the financial support of the African Development Bank (AfDB) and has completed its process membership by ratifying the ACA treaty. ATI membership provides African countries with additional trade and investment insurance capacity, which helps to hedge against the negative effects of COVID-19. ATI is expected to receive an estimated additional capital of US$138 million from potential new shareholders in the coming months.

This week, HE President Buhari signed the Instrument of Ratification of the African Trade Insurance Agency (ATI) Treaty. This signature finalizes Nigeria's accession process to the ACA, initiated a few years ago. Membership of the ATI provides Nigeria with additional insurance capacity to encourage new investments as well as increase the ATI's capacity to intervene in supporting Nigeria's sovereign and commercial transactions. This membership brings benefits to Nigeria, as effective risk mitigation is key to increasing investment and trade flows.

Nigeria's membership comes at a critical time for the economy, as a sharp drop in the price of oil, due to a one-third drop in demand, following the outbreak of the COVID pandemic which has had an impact on the country's spending plans. The IMF predicts that falling oil prices will cut Nigeria's export earnings by half, to $26 billion, which traditionally accounts for 90% of the government's budget.

ATI is well placed to provide support to African countries in coping with the pandemic. Over the past three years, ATI has helped attract nearly USD 3 billion in investment to several African countries. Through ATI's sovereign and sub-sovereign debt insurance solutions, governments and public enterprises have been able to obtain long-term financing at competitive prices.

ATI has already provided significant support to Nigeria's oil and gas sector, particularly oil traders, as well as the financial sector by insuring financial institutions.

“As one of the largest economies in Africa with a vibrant private sector, ATI looks forward to working with the Ministry of Finance, Central Bank, local financial institutions and major traders to support diversification plans. Nigeria's economy and its post-crisis recovery,” noted Benjamin Mugisha, ACA's Director of Underwriting.

As a key strategic partner, the African Development Bank (AfDB) played a significant role in financing the participation of several African countries. Between 2010 and 2020, the AfDB provided USD 70 million to finance the participation of seven African governments - Benin, Côte d'Ivoire, Ethiopia, Mali, Nigeria, South Sudan and Zimbabwe.

In the coming months, five countries are expected to become full members, while one member state has indicated its intention to increase its capital contribution. With the support of our strategic partners – the European Investment Bank (EIB) and the African Development Bank (AfDB), these countries will together benefit from financial support of USD 91 million.

In addition, the recent General Assembly approved three new membership applications worth US$47 million, demonstrating ATI's ability to mobilize international support to implement its development mandate and support the economic recovery of African countries, in the face of the effects of the global pandemic of COVID-19.

Distributed by APO Group for African Trade Insurance Agency (ATI).

Press contact: Sherry Kennedy Chief Communications Officer African Trade Insurance Agency [email protected], mobile +254 714 606 787

About the African Trade Insurance Agency: ATI (www.ATI-ACA.org) was established in 2001 by African States to cover the trade and investment risks of companies operating in Africa. ATI primarily offers political risk insurance, credit insurance and surety insurance. In 2019, ATI closed the year with realized hedges worth $6.4 billion and continued to post record results for the eighth consecutive year with net profit growth of 132% over 2018, particularly due to strong demand for ATI's insurance solutions from the international financial industry and African governments. For more than a decade now, ACA has maintained an “A/Stable” rating in Standards & Poor's Financial Strength and Counterparty Credit rankings. In 2019, ACA obtained an A3/Stable rating in the Moody's ranking.

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