Foreign exchange liquidity is expected to ease following the $3 billion crude repayment loan secured by the Nigerian National Petroleum Corporation (NNPC) Limited from AFREXIMBank to support the naira and stabilize the currency market.
The NNPC Limited and AfrEXIMbank jointly signed the commitment letter and term sheet at its Cairo Headquarters for the loan which is expected to support the federal government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market.
The move will boost foreign exchange liquidity in the country and will further drive down the exchange rate between the naira and the dollar.
The Naira crashed to as low as N900/dollar after the unification of the foreign exchange windows but was salvaged to N790/dollar after President Bola Tinubu’s meeting with the Acting-CBN Governor, Folashodun Shonubi during which he warned the speculators of government sanctions.
The deal comes about 17 months after the NNPCL secured a $5bn funding commitment from the African Export-Import Bank (Afreximbank) to finance major investments in Nigeria’s upstream sector.
The loan secured by the NNPCL is the fourth transaction involving the oil company and AFREXIM Bank over the last three years and goes to further consolidate the mutual relationship between the two entities.
Both Nigeria and NNPCL are shareholders in AFREXIMBank, with the sole purpose of enhancing investments and growing prosperity in Africa.
The agreement for the loan which was sealed on Wednesday in Cairo, saw the Group Chief Executive Officer of NNPC Ltd, Mallam signing for the National Oil Company while Dr George Elimbi, Executive Vice President Afreximbank signed for the bank.
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