March 1, 2024

Relief! Nigeria secures $3b emergency loan to reinforce the Naira

Image by The Nation

The Nigerian National Petroleum Company Limited (NNPCL) signed a commitment letter and term sheet with Afrexim Bank on Wednesday for an emergency $3 billion crude oil repayment loan, to support the Naira that has repeatedly slipped against the US dollar.

According to a brief statement issued by the NNPCL, the signing occurred at the bank’s headquarters in Cairo, Egypt.

The loan is expected to come with immediate disbursement, allowing the NNPCL to support the Federal Government’s continuing fiscal and monetary policy changes aimed at stabilising the foreign exchange market.

The Nigerian President, Bola Ahmed Tinubu, recently reaffirmed his commitment to tackling the forex challenge that has affected many critical sectors of the West African country.

NNPCL said that “NNPC Ltd and Afrexim Bank have jointly signed a commitment letter and Termsheet for an emergency $ 3 billion crude oil repayment loan.

“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will 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.”

The Naira fell 4.1% against the US dollar in the Investors and Exporters (I&E) segment of the foreign currency market on Tuesday, August 15, amid a continuing liquidity squeeze.

According to Business Post, the Naira was traded against the US dollar at N774.77/$1, up from N744.51/$1 on Monday.

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