Nigeria’s state-owned oil company NNPC announced on Wednesday that it has obtained a $3 billion crude oil repayment loan from the Afrexim Bank in Cairo. This loan will help the government’s initiatives to stabilize the currency market.
The state-owned oil company announced on X, formerly known as Twitter, that a commitment letter and term sheet had been signed for an emergency $3 billion crude oil repayment loan. The loan will instantly distribute funds, according to the NNPC, to support the “government in its ongoing fiscal and monetary policy reforms aimed at stabilizing the exchange rate market.” The biggest economy in Africa has been trying to increase its reserves and stop the decline of its currency, which has fallen to record lows on the black market two months after trading restrictions were relaxed on the official market. Following a meeting with President Bola Tinubu to examine methods to increase dollar liquidity on the official market, acting central bank governor Folashodun Shonubi said on Monday that the bank will take actions that will have an impact on currency markets in the coming days. Shonubi said the president was worried about the black market rate serving as a reference rate for domestic use and its influence on inflation, but he did not specify what steps would be done. With his boldest reforms in decades, Tinubu eliminated an expensive fuel subsidy and devalued the naira, sparking interest from foreign investors in the nation, which had been struggling with high inflation and skyrocketing debt-servicing costs. Foreign investors, meanwhile, have yet to come back.
