The Nigerian National Petroleum Company Limited (NNPCL) has announced its successful acquisition of a $3 billion emergency loan from the African Export-Import Bank (Afrexim). This move is intended to alleviate the pressure on the Naira, the national currency of Nigeria.
During a formal event held in Cairo, Egypt, representatives from both entities came together to jointly endorse a commitment letter and Termsheet for the substantial emergency loan amounting to $3 billion.
This financial arrangement is designed to provide immediate disbursements, which will serve to assist NNPCL in actively supporting the federal government’s ongoing fiscal and monetary policy reforms. These reforms have a primary focus on stabilizing the fluctuating exchange rate market.
The impact of this strategic initiative is anticipated to significantly increase the foreign exchange liquidity within the country, consequently working to reduce the exchange rate between the Nigerian Naira and the US Dollar.
Remarkably, this marks the fourth successful transaction conducted between NNPCL and AFREXIM Bank within the span of the last three years. This further solidifies the collaborative and mutually beneficial relationship shared between these two entities.
It is notable that both Nigeria and NNPCL are notable shareholders in AFREXIM Bank. Their joint efforts are dedicated to enhancing investment opportunities and fostering economic growth and prosperity across the African continent.
The formal agreement for this substantial loan, sealed in Cairo on a Wednesday, witnessed the participation of key figures. The Group Chief Executive Officer of NNPC Ltd, Mallam, endorsed the agreement on behalf of the National Oil Company, while Dr. George Elimbi, the Executive Vice President of Afreximbank, represented the bank by signing the agreement.
This significant development comes approximately 17 months following NNPCL’s accomplishment of securing a substantial $5 billion funding commitment from Afreximbank. This earlier commitment was specifically intended to support major investments within Nigeria’s upstream sector.
