President Bola Tinubu is happy that the $3 billion in crude-for-cash funding secured from the African Export-Import Bank (Afreximbank) by the Nigerian National Petroleum Corporation (NNPC) Limited is gradually giving a breather to the foreign exchange market.
The NNPC Limited and Afreximbank recently signed the commitment letter and Term sheet for the facility which is expected to support the federal government in its ongoing fiscal and monetary policy reforms to stabilise the forex market.
Sources at the villa said the president was happy that the deal has been able to crash the dollar and allow the Naira to gain some value.
The nation has battled foreign exchange liquidity leading to the steep fall of the Naira since the unification of the foreign exchange windows by the Central Bank of Nigeria in June. The crash in the value affected the economy, triggering price hikes in the country and impacting access to imported raw materials by real industry operators. The effect is exemplified in the July inflation which peaked at 24.08 per cent.
The source said the President and his team of economic advisers are hopeful that the deal will help the government breathe fresh air into the sluggard economy, make inflation recede and crash the dollar which has risen to an unprecedented N950 to the $ in the parallel market.
The $3 billion loan according to the oil giant is expected to support 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 Presidency source added that the “quick and proactive steps taken by the NNPC Limited show that this government has the capacity to turn around Nigeria’s economy positively in a short time. What the government needs right now is for forthright thinking appointees of the president to come up with novel ideas like this to better the economy”.
“Nigerians, he said, are impatience with government and as such Tinubu’s government doesn’t need laybacks or people with nothing to offer in the saddles of key leadership positions in government. People are impatience for the government to perform, and as such there are no rooms for trial-and-error ministers and heads of agencies” the source further stated.
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. It goes further to 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, Mele Kyari signing for the National Oil Company while George Elimbi, Executive Vice President Afreximbank signed for the bank.