The Federal Government under President Bola Ahmed Tinubu has received N2.017trn ($2.25bn) foreign exchange support facility from the African Import-Export Bank.
The Minister of Finance, Wale Edun, confirmed this to Arise TV, on Friday, December 29, 2023, and said it is the first tranche of the $3.3bn facility from the bank. He noted that the loan aimed to resolve the acute FX shortage hampered the economy.
According to the report, the balance of $1.05bn will be received in the first week of January.
Edun stated that work has commenced for solutions to Nigeria’s economic challenges.
In August, the Nigerian National Petroleum Company Limited announced that it had secured a $3bn emergency loan from the Afrexim Bank to stabilise the country’s volatile foreign exchange market.
Earlier in December, President Tinubu had assured Nigerians of the commitment by his administration to resolve the FX backlogs through injection of funds into the market.
Speaking at the opening of the recent 2023 Bank Directors’ Summit in Abuja, Tinubu had said funding of liquidity in the FX market, even though a short-term solution, remained critical for the economy at the moment.
There were concerns by investors and stakeholders that the government appeared to have reneged on its earlier commitment to inject between $7 billion to $10 billion into the FX market to clear the existing backlogs that impaired investors’ confidence in the economy.
However, Tinubu, who was represented at the summit by Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, had insisted there was ”no reason to feel that the indications that were made earlier had changed”, adding, ”It just takes time.”
He had said the government was doing everything in its power to try to attract funds that would shore up liquidity in the FX segment.
While Afreximbank is the lead arranger of the $3.3 billion loan, some other sub-lenders included VITOL, Guvnor, one of the world’s largest energy trading houses by turnover, Sahara Energy Group, Oando and the United Bank for Africa which chipped in $100 million.
Earlier in August, the Nigerian National Petroleum Company Limited (NNPC) had announced that it had secured a $3 billion emergency loan from the African Export-Import Bank to stabilise the country’s volatile foreign exchange market.
The new deal came over a year after NNPC said it similarly secured a $5 billion corporate finance commitment from the Afreximbank to fund major investments in Nigeria’s upstream sector.
Although the NNPC’s statement was silent on specifics in terms of the volume of each instalment of the FX expected and the quantity of crude oil to be repaid, the deal was expected to boost foreign exchange liquidity into the country and prop up the value of the naira against the dollar.
Analysts and business leaders have commended effort of Afreximbank bank to fund the country out of its FX liquidity challenges.
They said the funds would help curtail the exchange rate volatility and ease rising inflation.