The Nigerian National Petroleum Company Limited (NNPC) and Afreximbank on Wednesday signed a commitment letter and Termsheet for an emergency $3 billion crude oil repayment loan.
The signing, which took place 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.
In an explanatory note, the presidential spokesman, Ajuri Ngelale stated that the loan would enable the energy giant to pay taxes and royalties in advance enabling the government to have enough dollar liquidity to stablise the local currency.
“This new FX accretion is to enable NNPCL defray taxes & royalties in advance and provide the FGN w/ USD liquidity to stabilize NGN via incremental releases based on FGN needs. Stronger NGN = Lower Fuel Costs. This is a major buffer against the need to re-engage in subsidy regime,” Ngelale wrote in a post on X, formerly Twitter.