This move aimed to bolster the national currency and stabilize the foreign exchange market.
This crucial funding was secured through a strategic partnership with the African Export-Import Bank (Afreximbank) in Cairo, Egypt.
While specific details remain forthcoming, it has been revealed that the NNPC will undertake repayment of this loan utilizing crude oil resources, with an associated interest rate ranging 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.”
On Friday, the naira reached a historic low of N950 to the dollar in the parallel market.
Addressing the situation on Monday, President Bola Tinubu convened a meeting with Folashodun Shonubi, the acting Governor of the Central Bank of Nigeria (CBN). During the meeting, Shonubi outlined the apex bank’s forthcoming strategies to reinforce naira stability.
By Wednesday, there was an encouraging recovery in the local currency’s value, with the naira rebounding from N950 per dollar to N890 against the greenback.
As of July 2023, Nigeria had consistently produced an average of 1.255 million barrels of oil per day, based on data from the Organization of the Petroleum Exporting Countries (OPEC).
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