FOREIGN

NNPC Loan Will Be Used To Stabilise Naira- NEC

 

Nigeria’s National Economic Council (NEC) has assured that the $3 billion emergency loan secured by the Nigerian National Petroleum Company (NNPC) Limited in August, would be used to stabilize the Naira.

It would be recalled that Naira has crashed in the parallel market and continues to be volatile in the Investors & Exporters’ (I&E) window.

The Nasarawa state governor, Abdullahi Sule disclosed this while addressing State House correspondents after the 136th NEC meeting on Thursday.

“So, we are very confident and we still believe very strongly that with the plan that will come out and with all these items that have been listed on the improvement of revenue, the $3bn shall be useful to us down the line.”

On August 16, 2023, the NNPC announced that it has jointly signed a commitment sheet and Term sheet with the African Export-Import Bank (Afreximbank) for an emergency $ 3 billion crude oil repayment loan.

This is not a crude-for-refined products swap but an upfront cash loan against proceeds from a limited amount of future crude oil production.

The signing, which took place today at Afreximbank’s headquarters in Cairo, Egypt, was expected to provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market, as well as assist the NNPC in settling taxes and royalties in advance.

The funds are expected to be released in stages or tranches based on the specific needs and requirements of the Federal Government.

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Meanwhile, Reuters a few days ago reported that AfeximBank was reaching out to oil traders to finance a $3 billion it pledged to NNPC weeks ago.

It stated that AfreximBank is actively engaging with oil traders to secure a crucial $3 billion loan aimed at bolstering Nigeria’s state oil company and stabilizing the depreciating naira.

The foreign exchange market has continued to be volatile with the naira hitting a record N1000/$1 sometime last week.

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