The Nigerian National Petroleum Corporation (NNPC) Limited has secured a $3 billion emergency crude repayment loan to support the naira and stabilise the foreign exchange market.
NNPC Limited secured the crude-for-cash funding from the African Export-Import Bank (Afreximbank) headquarters in Cairo, Egypt. While the details are still sketchy, TheCable understands that the NNPC will repay the loan with crude oil at an interest rate between eight percent and 11 percent. “The NNPC Ltd. and Afrexim Bank have jointly signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan,” NNPC said in a terse statement on Wednesday.
“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 stabilizing the exchange rate market.”
Commenting on the development, Ajuri Ngelale, special adviser to President Bola Tinubu on media and publicity, said the new FX accretion is to enable NNPCL defray taxes and royalties in advance and provide the federal government with dollar liquidity to stabilise the naira via incremental releases based on the federal government’s needs. “Stronger NGN = Lower Fuel Costs. This is a major buffer against the need to re-engage in subsidy regime,” Ngelale said in a X post on Wednesday.
