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AfDB launches landmark US$500 million credit insurance deal with African Trade Insurance Agency, UK reinsurers

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The African Development Bank (AfDB) and African Trade Insurance Agency (ATI) announce the successful completion of a US$500 million credit insurance deal structured to cover a portion of the Bank’s portfolio of non-sovereign operations in Africa.

This transaction is expected to have an important demonstration effect to encourage similar institutions to invest more on the continent in the future.

While ATI will be the direct insurer facing the African Development Bank, the transaction involves the participation of a number of Lloyd’s & Company private reinsurers who will share the risk on African financial institutions. This vehicle will enable many insurance companies operating outside Africa to participate in the financing of development in Africa for the first time.

The deal is the second Balance Sheet Optimization transaction under the “Room to Run” initiative following the successful signing of the Synthetic Securitization transaction in September.

The insurance will cover approximately 22% of the Bank’s US$2.3 billion outstanding non-sovereign financial sector portfolio. Specifically, it will protect the Bank against the non-payment of loans made to approximately 30 African financial institutions. The portfolio spans the African continent, with exposure to financial institutions in all major regions of the continent, and is expected to release sufficient capital to create almost US$500 million of headroom for new lending.

“This transaction leverages the Bank’s own capital to achieve more development and lending as it creates new pathways for collaboration between private insurers and the Bank in the development of the African continent,” said Akinwumi Adesina, President of the African Development Bank Group. “This is a significant step towards enhancing Africa’s finance partnerships across the globe.”

Adesina added that, given Africa’s endowment as a resource-rich continent with a strong economic outlook, the Bank had adopted more efficient and effective initiatives to bridge the existing development financing gaps.

Launching the transaction at an event in London, Penny Mordaunt, International Development Secretary commented, “This is a great example of how the City of London can partner with African institutions to mobilise more investment for developing countries and support the creation of the 18 million new jobs a year which Africa needs. This work is driving economic development abroad and supporting prosperity at home”.

The transaction is also expected to strengthen the development of credit insurance markets in Africa. The experience and comfort gained in transferring risks between the African Development Bank, the African Trade Insurance Agency and the Lloyd’s reinsurers is expected over time to lead to the lengthening of insurance terms and lower insurance and financing costs, leading to more trade and investment in, and among, the private sector and the African region.

“With ATI’s insurance guarantees leveraging the balance sheet of AfDB and crowding-in new investments, this innovation provides a timely solution to the scarcity of trade finance that could create enormous impact across the continent. ATI’s commitment reflects the US$35 billion worth of trade and investments that we have supported in the past decade, which, thanks to this model, can now be more easily replicated, to the ultimate benefit of Africa” said George Otieno, Chief Executive Officer of ATI.

RFIB commented, “RFIBs Political Risk & Trade Credit team (PRTC) are delighted to have been able to assist the African Development Bank and ATI in putting together this significant insurance-backed programme that will allow the Bank to facilitate further lending, promoting further development in Africa.”

This landmark transaction between AfDB and ATI is one of several recent initiatives undertaken by the Bank under its “Room to Run” program that responds to the G20 and G7 call on the multilateral development banks (MDBs) to explore innovative ways to optimize their balance sheets to achieve the “Billions to Trillions” development agenda. Credit insurance is one of such instruments involving a specialized market with currently low penetration in Africa, but intent on playing a more active role.

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Rep Oseni Urges Unity, Compassion in Christmas Message to Nigerians

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As Nigerians celebrate Christmas amidst festivities and reflections, the Chairman of the House Committee on Federal Roads Maintenance Agency (FERMA) and lawmaker representing Ibarapa East/Ido Federal Constituency of Oyo state, Engr. Aderemi Oseni has sent a heartfelt message to Nigerians, emphasising the importance of unity, compassion, and selflessness in nation-building.

In his Christmas message on Wednesday, contained in a statement by his media aide, Idowu Ayodele, and made available to journalists in Ibadan, the lawmaker described the season as a time to reflect on the love and sacrifice demonstrated by the birth of Jesus Christ.

He urged citizens to embrace the spirit of giving, kindness, and shared humanity that Christmas symbolises.

“Christmas is a season of hope, joy, and renewal,” Oseni said. “It reminds us of our shared duty to show love to one another, regardless of ethnicity, religion, or political affiliations. Let us work together to foster unity and peace in our country, especially as we navigate through challenging times.”

The lawmaker also highlighted the significance of collective responsibility in nation-building.

“As we celebrate, we must remember the less privileged in our communities. Acts of charity and kindness, no matter how small, can make a significant impact on someone’s life,” he added.

The APC chieftain expressed gratitude to his constituents in Ibarapa East/Ido for their unwavering support, assuring them of his commitment to delivering more impactful governance.

He also called for patience and cooperation as the government works towards addressing issues affecting the nation, including infrastructure development, economic stability, and security.

“Let this Christmas inspire us to continue building bridges of hope and fostering the true Nigerian spirit of togetherness,” he stated.

As the year draws to a close, Oseni encouraged Nigerians to remain optimistic about the nation’s future, assuring them that better days lie ahead with collective effort and unwavering faith.

 

 

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NCAA Sanctions Five Airlines Over Regulatory Breaches

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The Nigeria Civil Aviation Authority (NCAA) has initiated enforcement action against five airlines—two international and three domestic operators—for various violations of its regulations under Part 19.

The offenses include non-payment of passenger refunds within the stipulated timeframe, non-responsiveness to NCAA directives, mishandling of luggage, short-landed baggage, delayed and canceled flights, among other infractions.

Addressing journalists at the NCAA’s corporate headquarters in Abuja on Tuesday, Michael Achimugu, the Authority’s spokesman, stated that airlines must adhere to regulations regarding flight disruptions. He emphasized that failure to comply attracts sanctions.

“Although airlines are not always responsible for flight disruptions, NCAA regulations stipulate actions that airlines must take during such incidents. Failure to comply attracts various levels of sanctions,” Achimugu said.

He reminded airlines of the NCAA’s recent directive mandating refunds to passengers within 14 days for online ticket purchases and immediate cash refunds for tickets bought with cash.

The yuletide season has seen a rise in passenger complaints about delays and cancellations, largely attributed to harmattan-induced poor visibility. Achimugu clarified that airlines are not liable for cancellations due to force majeure but stressed that the enforcement actions are for cases where airlines are found at fault.

“This is harmattan season, so there is poor visibility. Flights must get canceled. This is force majeure, and the airlines do not owe passengers anything in those instances. The enforcement we are initiating today is on cases where the airline is deemed to have been at fault. More will come,” he explained.

Achimugu further disclosed that the NCAA would summon the chief executives of all airlines this week to address flight disruptions and regulatory breaches.

While the names of the sanctioned airlines were not officially revealed, sources close to the Authority identified them as Ethiopian Airways, Royal Maroc Airways, Arik Air, Aero Contractors, and Air Peace.

 

 

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FG Targets 15m Households for Conditional Cash Transfer Scheme

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The Minister of Humanitarian Affairs, Disaster Management, and Social Development, Nentawe Yilwatda, has announced the Federal Government’s plan to reach 15 million households, representing 75 million people, through its conditional cash transfer scheme.

Speaking on Monday during an interview on Channels Television’s The Morning Brief, Yilwatda explained that the initiative is part of President Bola Tinubu’s commitment to mitigating the economic hardships faced by vulnerable Nigerians.

“The president was so specific,” Yilwatda noted.

“There are policies that he brought in to see if that can ease those challenges for people at the lower end of the pyramid. One of those policies is to reach out to 15 million beneficiaries under the conditional cash transfer, targeting households rather than individuals. Each household will receive ₦25,000 monthly, paid three times a year.”

Yilwatda further clarified that the 15 million households being targeted translate to 75 million Nigerians, assuming an average of five persons per household.

So far, the Federal Government has reached five million individuals but is facing challenges in fully sanitizing the social register, particularly with the implementation of the Central Bank of Nigeria’s (CBN) policy mandating digital identities for transparency and traceability of payments.

“Currently, only 1.4 million people on the social register have digital identities. Many of those we are targeting are outside the formal banking system,” the minister disclosed.

Yilwatda emphasized that women are specifically targeted as household leaders under the program to ensure the funds are used effectively for the benefit of children and other vulnerable members of society.

The conditional cash transfer programme, which is administered under the National Social Investment Programme, had earlier been suspended by President Tinubu in January due to allegations of corruption. However, the scheme was reinstated in February, with plans to extend the initiative to an additional 12 million households.

 

 

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