The National Economic Council (NEC) has stated that the $3 billion emergency loan-for-crude oil that was secured by the Nigerian National Petroleum Company (NNPC) Limited in August would be used to stabilise the naira.
21st CENTURY CHRONICLE reports that the naira has crashed in the parallel market and still experiencing volatility in the Investors & Exporters’ (I&E) window.
Nasarawa State Governor, Abdullahi Sule, who disclosed NEC’s position while addressing State House correspondents after the 136th NEC meeting, which was held at the Aso Rock Presidential Villa, Abuja, expressed confidence that with the plan that will come out and all the items that have been listed on the improvement of revenue, the $3bn shall be useful down the line.
On August 16, 2023, the NNPC announced that it had jointly signed a commitment and term sheet with the African Export-Import Bank (Afreximbank) for an emergency $3 billion crude oil repayment loan.
The loan is an upfront cash loan against proceeds from a limited amount of future crude oil production.
The signing, which took place at the Afreximbank’s headquarters in Cairo, Egypt, is 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 stabilising 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.
Reuters had earlier 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 stabilising the depreciating naira.