March 2, 2024

NNPC intervenes to stabilise exchange rate, secures $3bn emergency crude repayment loan from AFREXIM bank

Oredola Adeola

 

The Nigerian National Petroleum Company (NNPC) Limited and the African Export-Import Bank (AFREXIM Bank) have jointly signed a commitment letter and term sheet for an emergency $3 billion crude oil repayment loan.

 EnergyDay gathered that the signing took place on Wednesday at Afreximbank’s headquarters in Cairo, Egypt.
According to Mele Kyari, Group Chief Executive Officer (GCEO) NNPCL, the loan will provide immediate disbursement and enable the national oil company to support the Federal Government in its ongoing fiscal and monetary policy reforms.
He added that the loan aimed at stabilizing the exchange rate market.

EnergyDay’s further check showed that the intervention by the NNPC and Afreximbank is aimed at stabilizing the Naira and providing immediate disbursement. 

 

Nigeria’s economy has in recent times faced challenges due to foreign exchange volatility, declining oil production, exchange rate distortions, and high inflation. 

This loan and credit assistance from international development banks including Afrexim Bank and others is meant to combat the country’s monetary challenges.

 

In November 2021, Afreximbank signed a $1.04 billion facility with NNPC for petroleum exploration. 

Also in November 2021, NNPC and Afreximbank signed a $1.4 billion agreement for trade financing. 

In January 2022, NNPC secured a $5 billion corporate finance commitment from Afreximbank to fund Nigeria’s oil industry.