By Oludare Mayowa
The presidency said on Wednesday that the state-owned energy giant, Nigerian National Petroleum Company Limited (NNPC), borrowed $3 billion to enable it to pay taxes and royalties in advance to help the government support local currency.
In a post on his X, formerly Twitter handle, presidential spokesman Ajuri Ngelale stated that the loan borrowed by the energy giant would enable the company to pay taxes and royalties in advance and enable the government to have enough dollar liquidity to stabilize the local currency.
“This new FX accretion is to enable NNPCL to defray taxes and royalties in advance and provide the FGN with USD liquidity to stabilize the NGN via incremental releases based on FGN needs stronger NGN means Lower Fuel Costs.
“This is a major buffer against the need to re-engage in the subsidy regime,” Ngelale wrote in a post on X, formerly Twitter.
The NNPC announced on Wednesday that it signed a commitment letter and term sheet with Afreximbank 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 disbursements 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 her reaction to the news, the chief economist of Standard Bank, Razia Khan said that it was “Meaningful that NNPC announces the $3 billion facility as ‘relief for the naira.”
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